Who's the biggest mortgage servicer of them all?
Right now, it's Countrywide Credit Industries, Pasadena, Calif. But that may not be for very long. When the Chemical-Chase merger is completed, the new Chase could be No. 1 by a slim margin.
Countrywide, whose news releases have been calling it the largest independent mortgage company, has been preparing for the day it may get bumped.
But it isn't sitting still. It put on a bit of a sprint in September, as its servicing portfolio reached $129.7 billion and showed signs of continued strong growth. As of midyear, the Chase and Chemical portfolios totaled about $133 billion.
And a third contender may be waiting in the wings: one of a number of companies that have been bidding for the mortgage business - including servicing - of Prudential Insurance Co. of America. They are Norwest Mortgage Corp. and GE Capital Mortgage Corp.
A victory by second-place GE would vault it into the No. 1 position by a wide margin with more than $150 billion in its portfolio - even though it has chosen to let its own business trail off a bit this year.
Norwest could also approach $150 billion. But the front-runner in the bidding is said to be a group led by BancBoston Mortgage. BancBoston would fall well short of the top spot but could pop into second place.
One hypothetical scenario for Countrywide: The company, under the aggressive leadership of vice chairman Angelo Mozilo, is determined to maintain the prestige of being No. 1 and could, if it chose, make some bulk purchases of servicing - readily available in today's market - to keep its lead.
But a company spokeswoman pointed out that its bulk purchases of servicing have been declining, and it has bought only about $500 million through August of this fiscal year, which ends Feb. 28. Purchases matched prepayments in September, allowing the company to achieve a net gain of about $3 billion for the month.
"Our goal is to be No. 1 in market share and in profitability," she said. "We're not going to buy servicing just to be No. 1.
As for Chemical-Chase: Continued normal growth by the separate companies may put them on top when their deal is complete no matter what Countrywide does. But the question is whether growth will suffer during the consolidation phase.
