JAMES F. DWINELL 3d

President Cambridge Trust Co. Cambridge, Mass.

Neither. We write only two-year adjustables, and we keep them all in-house. We don't charge any points, and we've done pretty well with them. We felt that we'd prefer flexibility to the guidelines for selling in the secondary market.

For example. we once issued a mortgage that represented 50% of the borrowers' income for the first year, and 30% the second. That's not a mortgage you could sell in the secondary market, but it was a risk we wanted take. If customers insist on a fixed mortgage, we try to help them find one. I have heard of a savings bank that holds its two-, five-, and seven-year fixed loans.

RONALD F. KNIGHT

Executive vice president Cavalry Banking Murfreesboro, Tenn.

We sell all of our fixed-rate mortgages. The structure of the industry would have to change for us to start holding.

We have no fixed cost that extends out 15 or 30 years, and nothing whose costs are guaranteed that-far out -- and a match of assets and liabilities tells you you can't offset an expense that changes on a frequent basis.

We might package and hold some fixed-rate mortgages for not more than 30 days, but it's just to securitize and sell them at a later date. I can't conceive of anyone originating 15- or 30-year loans with the intent to hold them to maturity.

CHARLES R. LUSK

President and CEO Rossville (Ga.) Bank

We are holding the five-year balloners -- maybe 3% or 4% of our portfolio -- but that's about it. If someone wants a fixed-rate loan, I'm passing my interest rate risk on to someone else.

Some of the savings banks are starting to hold them, or at least while they see what interest rates do -- though they're limiting them to a set dollar amount.

But I think they are traditionally more attuned to the home mortgage market. Most of the savings bank people in this part of country are former S&L people, and their mentality is just different from a commercial bank mentality.

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