help steer the company further into retail lending as it abandons the use of outside brokers. Saiyid Naqvi, formerly president, was promoted last week to chief executive of the mortgage company, replacing Walter C. Klein Jr., who has resigned. Mr. Klein also held the position of chairman, a spot that will not be filled. The company said Mr. Klein, a prominent industry figure who is known as Terry, plans to pursue other business interests. He will remain with the company until the end of this year. A spokesman said Mr. Klein, who came to the company with its 1993 purchase of Sears Mortgage, was traveling and could not be reached for comment. Mr. Naqvi indicated that Mr. Klein's departure resulted from a decision by PNC Bancorp that one senior executive, not two, should oversee the business. The company said Mr. Naqvi's technological bent made him "particularly well suited to ensure that PNC Mortgage remains an industry leader." Mr. Naqvi, like Mr. Klein, came to PNC Mortgage through the 1993 acquisition of Sears Mortgage by PNC Bancorp, Pittsburgh. Mr. Naqvi had joined the Sears unit in 1985 as senior vice president of secondary marketing. Before that, he held a similar secondary-marketing position with Citicorp Homeowners. Now he will oversee all operations for PNC Mortgage, a Vernon Hills, Ill., operation that ranks among the industry leaders. At midyear, it was servicing $38 billion of loans, placing it 15th among industry peers. Originations, which stood at $2.3 billion at midyear, have fallen sharply this year, mirroring sluggishness in the industry as a whole. The mortgage company contributed $51.3 million to the parent company's earnings in the third quarter, $27.6 million less than in the period a year earlier. The decline reflects smaller gains on sales of servicing, PNC Bancorp said. PNC Mortgage believes it can increase revenues and reduce costs by severing its relationships with independent mortgage brokers. Two weeks ago, the company began informing a cadre of 200 outside brokers that it would no longer supply products to them. The move caught some brokers by surprise, and left a number of them disappointed, Mr. Naqvi said. But brokerage business was accounting for just 10% to 20% of annual originations, and consuming a lot of time and expense, Mr. Naqvi said. Correspondent relationships with banks, credit unions, and savings banks accounts for another 20%, while retail operations make up the balance of volume. Industry observers believe the company's decision to sever its relationships with brokers was strategically sound. "The margins are very thin" on the brokerage side, said James M. Schutz, senior bank analyst at Chicago Corp. Besides, PNC, through its own loan offices and the PNC Bank branch system, "has a great distribution network," Mr. Schutz said. Mr. Naqvi said PNC's 600 lending offices, with a broad array of products and services, will enable the retail business to grow even bigger. At the same time, PNC is also making its loan officers more competitive, with laptops that connect them directly to loan processors, a step that expedites originations, he said.

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