The vicious competition in mortgage lending has moved to a new front: people.

Top lending officers are being wooed from their employers in as little time as it takes to say "originate."

The companies staging these raids are hoping that their new heavy hitters will be able to produce handsome volumes in the face of a continued market slump. And in many cases, observers say, the hiring companies are paying dearly.

"Prudent management is disappearing, with the attitude of more is better - we'll pay for it and damn the cost," said Joe Bryant, executive vice president at Long Island Savings Bank.

He said he has seen some commission packages as hefty as 0.65% to 0.70% of each loan originated, versus the normal rate of 0.50% to 0.55%. Some companies are clearly losing money on their payouts, he said.

The skirmishing burst into public view last week when Fleet Mortgage Group, Columbia, S.C., obtained a restraining order to prevent Resource Bancshares Mortgage Group, also of Columbia, from aggressively recruiting Fleet employees. Resource, a much smaller company than Fleet, had hired several branch managers from Fleet.

Some in the industry say the current looting of lenders for top originators is the most aggressive and competitive in recent years. The enticements are especially remarkable because they come at a time when the industry is generally trying to cut costs.

Mark Springer, an executive recruiter based in Woodland Hills, Calif., said he considers some of the recruitment tactics he has seen recently irrational and costly.

Some offers include a guaranteed payment of two times the commissions that the originator would have earned had he closed loans that were pending with his previous employer.

"Things like that used to happen with the top 1% of originators," Mr. Springer said. "Now it's happening with the top 5%."

Paying originators for loans pending with their previous employers is not entirely new - but the practice has become much more common this year, said Sam Lyons, senior vice president of mortgage banking at Great Western Bank.

Even with the recent drop in interest rates, business has remained fairly slow, so companies "have more time to think about ways to steal other companies' top people," Mr. Lyons said.

Employees, too, are concerned about their jobs because of consolidation and cost cutting at lending institutions due to the decline in volume.

"Employees are taking a very proactive approach," said Allen Gutterman, president of Response Professional Placement in New York. "They are listening to any opportunity that comes to them."

The restraining order that Fleet obtained prevents Resource from soliciting Fleet staff during business hours, approaching Fleet staff on Fleet's premises, continuing to solicit after a job offer is refused and soliciting Fleet customers whose names were learned through recent defections.

Resource said that Fleet's complaints were groundless.

"The effect of the order is to prevent (Resource) from doing things we haven't done and have no intention of doing," said Doug Tinkler, Resource's general counsel.

Resource, started from scratch six years ago, has grown rapidly in wholesale and correspondent lending. More recently it has been expanding in retail originations.

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