Fleet Mortgage Inc. has joined the mortgage servicing elite. Its portfolio has passed the $100 billion mark.

In buying a $15 billion servicing portfolio from Household Mortgage Services earlier this week, Fleet became the third-largest home mortgage servicer - and one of only four to handle more than $100 billion of loans.

Fleet's mortgage servicing portfolio is now $105 billion, behind only Countrywide Credit Industries, Pasadena, Calif., which has a $119 billion portfolio, and GE Capital Mortgage Services, Raleigh, N.C., at $110 billion. Fleet has replaced Norwest Mortgage Co.'s $100 billion portfolio as No. 3.

"We are delighted that we are in that exclusive club," said Gerald L. Baker, Fleet Mortgage's chairman and chief executive officer.

As recently as 1988, only one servicer had cracked the $50 billion mark. But the mortgage industry has been consolidating at record speed lately.

Some servicers have left the business, citing increasing costs and lack of profits. Others have snapped up portfolios as quickly as they could from those exiting, in efforts to achieve economies of scale. These companies say they can take on more servicing with little additional cost, thanks in part to their advanced technology.

Last month, GE bought portfolios from AmSouth Bancorp and Wachovia Corp. in two days that vaulted its portfolio to the No. 2 position.

Fleet's servicing portfolio was $82.2 billion at yearend 1994. That year, it acquired Plaza Home Mortgage Servicing Corp., adding $8.5 billion in servicing to its portfolio. Fleet also acquired $3 billion in servicing from an unnamed seller and $5.9 billion from Countrywide Credit Industries.

"We just want to be the best we can and beat everyone out there," Mr. Baker said.

"I think there is a tremendous amount of competition in the industry to be better than the next guy," he added. "Generally it is friendly competition and not bitter, or with people throwing stones at each other," Mr. Baker said.

Mr. Baker joined Fleet in November 1994. Previously, he was a managing director at Countrywide, overseeing loan production.

Household Mortgage, a subsidiary of Household International, announced last year that it was shutting its mortgage origination business and carrying out extensive layoffs. In 1993, it originated $4.2 billion in loans, making it No. 39 in the nation.

Laura McDonald, a senior manager at KPMG Peat Marwick, said smaller servicers once considered profitable now think they can not compete with the large super-servicers on the scene today. They have to consider the costs to purchase servicing and invest in technology to run the servicing operations.

"They should ask if they should get out or make servicing more efficient, and are they able" to make the operation more efficient, Ms. McDonald said. "Is the cost to become more efficient worth it?"

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