Merger mania may soon cool off in the mortgage industry. Demand for mortgage companies -- and prices -- are now near a cyclical peak, a leading mergers adviser said this week.

"We're maybe a little before the peak, maybe a little after it," Thomas J. Murrary, president of Hamilton Carter Advisors Inc., said at a seminar in Philadelphia.

For the past two years, buyer interest in mortgage companies has been running high because of the originations boom brought on by low interest rates.

But Mr. Murray said potential buyers are getting worried that the boom is about to run its course.

All About Interest Rates

"People believe that interest rates may be on the verge of turning upward," he said.

Mr. Murray was speaking at a seminar sponsored by his firm's parent, Hamilton, Carter, Smith & Co. The parent, based in Los Angeles, specializes in brokeraging servicing portfolios.

Mr. Murray declined to specify any falloff in company prices. But he said he had detected "a softening in transaction structures" lately. For example, fewer and fewer buyers are willing to pay all cash up front.

All the same, he said, there are still plenty of buyers in the market, ranging from private families to leveraged buyout firms to large, publicly traded mortgage companies.

"There are still far more buyers out there than there are sellers," he said.

The recent auction of Sears, Roebuck & Co.'s huge mortgage operations attracted seven "highly qualified buyers," he said. The winner was PNC Bank Corp.

Meanwhile, a small Southern California company on the block has received indications of interest from about 30 parties, Mr. Murray said. He did not identify the company.

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