In mid-1993, NationsBank had less than $19 billion of loans in its mortgage servicing portfolio. Boatmen's Bancshares had just under $2 billion. When the two merge this year, NationsBank will join the exclusive club of lenders servicing $100 billion or more.

About half of that servicing has been acquired by NationsBank or Boatmen's since the beginning of 1995.

The Charlotte, N.C.-based NationsBank has built its portfolio partly through its acquisitions of other banks and partly through portfolio purchases. Last year, it bought $25 billion of rights from KeyCorp. and another $10 billion from Source One Mortgage Service Corp.

Boatmen's has also been on the acquisition trail, buying Memphis- based National Mortgage Inc. with some $14 billion in servicing, early last year. Shortly thereafter, it acquired Worthen Banking Corp., adding $1.7 billion of servicing.

With each company already operating two servicing centers, it seems likely that some consolidation lies ahead. Boatmen's has a reputation for high-level technology, which it acquired in the purchase of National.

Mark Wender, chief operating officer at Boatmen's, said shortly after the Memphis deal: "National Mortgage has been recognized as one of the leaders in using technology in the servicing area. Now we are working to become equally good in the origination field, an area where we lagged when the merger took place."

In particular, Boatmen's has an advanced imaging system, a rarity in the mortgage business. Early this year, it had 20 million documents scanned into its Filenet system that were available on 200 personal computers in its loan servicing department. Its foreclosure department was expected to become a user soon as well.

Splicing the two companies' servicing systems should be relatively easy. NationsBanc Mortgage uses Alltel Inc.'s interchange system, and Boatmen's has been converting to Alltel as well.

On the lending side, the partners' offices appear to have little geographic overlap. In terms of market niches, Boatmen's is particularly strong in government-insured loans, which had not been a big business with NationsBanc Mortgage.

Andrew Woodward, president of NationsBanc Mortgage and the presumed head of the combined units, said he was more concerned with economies than with sheer size. "I want to be the lowest-cost provider," he said.

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