Keycorp's proposed merger with Society Corp. would propel the new company well up into the ranks of the top 20 servicers of residential mortgages.

As of June 30, Keycorp Mortgage serviced about $18.4 billion of home loans for others and about $5.3 billion for itself, the unit reported. Society's portfolio of $4.7 billion includes $2.5 billion for itself and $2.2 billion for others.

Definitive rankings for the first half are not yet available, but the deal might push the combined companies as high as No. 10 in terms of servicing for others. This measure downgrades large portfolio lenders, mostly thrifts and commercial banks, that service large amounts of loans they hold for investment.

Prices of servicing portfolios have varied widely this year because of differences in prepayment vulnerability. Recently deals suggest that the Society servicing portfolio, if sold separately, might bring about $50 million.

First Tennessee National Corp., for example, acquired Maryland National Mortgage this summer and valued its $3.9 billion of servicing at $40 million.

Using the same yardstick, Keycorp's servicing rights might bring about $150 million.

These valuations, though, are speculative, sources said. Because of the present high level of prepayments due to refinancings, mortgage companies are reluctant to buy large portfolios of servicing without some origination capability to offset the likely runoff.

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