Decision-making in the mortgage business is shifting from lenders' branch networks to their home offices. This means vendors that are still talking to branch or regional managers are in many cases barking up the wrong tree. No more wining, dining, or schmoozing with the shirtsleeve crowd. Now, the salespeople have to talk directly to the suits in the executive suites.

This trend toward centralization is hardly new. The later entrants into home equity lending have been quick to centralize marketing, applications processing, and servicing.

Two established lenders that stuck with a branch-office network and local control, Security Pacific Financial Services and Transamerica Financial Services, have not performed well and both are up for sale.

The mainstream mortgage industry has been slow to come around, however. But now, with consolidation proceeding apace, the bricks-and-mortar approach to business losing favor, and profits increasingly elusive, lenders are using technology to centralize decision-making and control.

In a recent talk in Tucson, Ariz., John Fulford, a senior vice president for marketing at Fannie Mae, said the effective use of technology would be a critical issue for lenders, noting that costly automation could cut into profit margins. He added that a broad view of technology, encompassing management decisions as well as back-office processing, was vital.

Mr. Fulford himself may have become a victim of these trends. He recently left his marketing post at Fannie Mae after about a year on the job.

Previously, he was head of Fannie's highly successful Western regional office in Pasadena, Calif., and regarded as superb at relationship management at the local level.

Mr. Fulford says he left because he misses the face-to-face contacts with large numbers of customers that he had at the Western office.

But industry sources say Fannie Mae has been rethinking its marketing programs and may have wanted a different kind of leadership.

On a separate topic, Mr. Fulford cautioned his Tucson audience that lenders could no longer rely on plain-vanilla products to bring in profits and would be well advised to explore specialized products for which there may be smaller-but more profitable-markets. *

Did banks and mortgage companies lose market share to thrifts last year? According to early figures from the Office of Thrift Supervision, mortgage originations by thrifts climbed by 28%.

Final figures for industrywide originations aren't in yet, but most forecasters expect a gain of perhaps 10%. So it seems the thrifts grabbed share.

But the numbers are problematic. A 28% gain by the thrifts along with a 10% gain for the industry would give the thrifts a 19% share for the year, more than they had in any of the first three quarters. And the fourth quarter itself was not especially vigorous.

Even if that number holds up when all the reports are in, that would be 2.3 percentage points for the thrifts, a solid gain for them but not much of a loss when split up among the rest of the industry's institutions.

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