Bids are due today on a $1 billion package of mortgage servicing rights from SunTrust Mortgage.

The unit of SunTrust Banks Inc. in Atlanta is one of many large bank-owned mortgage companies auctioning big servicing portfolios this month. Other recent sellers include the home loan units of Colonial Bancgroup in Montgomery, Ala., and First Tennessee National Corp., Memphis.

Two motives account for companies' selling servicing. The first is money: The rise in interest rates over the past year has made servicing rights more valuable because homeowners are less likely to pay off their loans early and servicers therefore can count on collecting fees longer.

Companies are limited in how much they can write up their servicing assets, so selling is often the only way they can realize the gain in value - and make up for reduced profits in their production departments.

The other motivation to sell servicing is strategic: to rid a portfolio of loans that carry risks the company does not want to handle, or that may be more valuable to another company. Sterling Edmunds, president and chief operating officer of SunTrust Mortgage, said this is "the main reason" behind his company's auction.

Mr. Edmunds said SunTrust regularly sells packages of servicing on loans originated by brokers and correspondents outside the parent company's territory, which stretches from Florida to Maryland. SunTrust is more likely to sell other financial products to homeowners in areas where it has a retail banking presence, and such people are also more likely to come back to SunTrust when they want to refinance, he said. "A big percentage of the value of servicing is in cross-sell and retention."

But brokers not handling the auction viewed the sale as a move to boost the mortgage company's earnings. They based this interpretation on the portfolio's very low average coupon of 7.3% - which makes it a very desirable asset at a time when the average rate on a 30-year mortgage is well above 8%.

Such a portfolio has "the greatest probability of obtaining the maximum price," one broker said. "They'll get the biggest bang for their buck."

Brokers see prices stretching above six times servicing fees for low-coupon servicing - which means SunTrust's package could fetch more than $15 million. Most of the loans in the portfolio were originated by the mortgage unit of Crestar Financial Corp. of Richmond, Va.

SunTrust bought Crestar in late 1998 and merged their two mortgage subsidiaries.

Countrywide Servicing Exchange, a unit of Countrywide Credit Industries, is running the auction.

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