Two mortgage banks have found a kinder, gentler path to consolidation.
Banc One Mortgage, Indianapolis, plans to close its loan processing center in Phoenix. But rather than leave its 77 employees there out in the cold, the mortgage division of Banc One Corp. has found jobs for them with Norwest Mortgage, which is expanding its Phoenix operation.
Companies often act to help laid-off workers find other jobs. But "a wholesale transfer like this is highly unusual," said Edward Furash, a consultant at Furash & Co. in Washington.
Banc One's Phoenix center processes loans originated in Arizona, Colorado, and Utah. That function will be moved to its processing centers in Indianapolis and Findlay, Ohio.
The move results from the recent sale of Banc One's mortgage servicing business to HomeSide Lending, Jacksonville, Fla., according to Banc One spokesman Steve Roman.
Banc One will be one of HomeSide's "preferred" partners that originate loans through their own retail networks and leave the servicing to HomeSide. The bank retains the right to cross-sell products to mortgage customers.
Banc One decided that it would be more efficient to consolidate its processing in Findlay and Indianapolis because these two centers get a larger volume of business than Phoenix does, Mr. Roman said.
Banc One Mortgage will continue to employ 100 people in Phoenix in originations, wholesale lending, and telemarketing.
Norwest Mortgage decided in the first quarter to set up a centralized processing office in the West for loans originated through telemarketing, said Steve Bulmer, senior vice president of operations.
"We needed another site because a lot of cities we're in today are very tight labor markets," he said. "It's getting harder and harder to hire people. Across our network we need some more capacity to handle the volume that's out there today."
Less than a month ago Norwest Mortgage was still debating whether to put the new office in Phoenix or Colorado Springs, Mr. Bulmer said. Banc One's employee surplus was the clincher.
"It was a great way to get some critical mass for our operation," Mr. Bulmer said.
Banc One's Phoenix center will not close until the end of October. Norwest will begin making job offers to Banc One processors early next week, Mr. Bulmer said.
"This is an enlightened approach," Mr. Furash said. "It's obvious evidence to other Banc One employees that there is a caring attitude about all these combinations that are occurring." Banc One Corp., meanwhile, is expected to close its deal with First Chicago NBD Corp. in the fourth quarter.
If they refuse Norwest job offers, the 77 Banc One employees will not be eligible for severance pay, Mr. Roman said. However, he said, Banc One will pay a retention bonus to those who stay on through Oct. 31. Norwest is offering sign-up bonuses.