This year is shaping up as a record-breaker, with mortgage originations likely to top the previous record of $1.01 trillion by a handy margin.

But lenders are behaving differently than they did in 1993, when they pulled out all the stops and staffed up heavily to meet the unprecedented demand.

This time around, staffing appears to be well under control. With the biggest, lowest-cost originators showing the biggest gains in lending volume, costs are being contained. Furthermore, a sudden slump in volume like the one that occurred in 1994 does not appear to be in the cards, and most lenders are looking for another strong year in 1999.

In this supplement, freelance Lawrence Richter Quinn previews the likely changes in the servicing business that lie just ahead (page 4A). The outlook, he writes, is for more consolidation as the economy remains ripe for a continuing surge in mortgage lending. He also looks at the changes in the servicing business this year as technology continues to push costs down.

While refinancings have been booming this year, lenders are also benefiting from the record-breaking pace of new home sales, as described by another freelance, Anthony Heffernan (page 8A)

As a result of the big gains in originations, two new members have joined the $100 billion servicing club-Homeside and Washington Mutual. One has dropped out: GE Capital Mortgage.

And the gains in originations have been remarkably uniform across the mortgage industry. Most companies in the top 100 just about doubled their volume in the first half from the first half of 1997. Tables begin on page 13A.

The originations boom also increased the market share of servicing by the top 100 to 66% as of June 30, against 62% a year earlier. On the originations side, the top 100 gobbled up about 85% of market share in the first half of this year, against about 64% a year earlier.

HomeSide Lending took top honors in servcing growth among the top 10 with a gain of 26.4% and No. 11 Home Savings of America did a little better with 26.6%.

Meanwhile, one big change lies in store for the mortgage industry: the retirement of James A. Johnson as chairman of Fannie Mae (page 26). Mr. Johnson has been a key figure in the industry's growth for the last 10 years. But observers say his replacement, Frank Raines, should step in seamlessly and continue Fannie's exceptional growth record.

At Countrywide Home Loans, though, honcho Angelo Mozilo shows no signs of slowing down as he approaches retirement age. He is leading the company into a very ambitious 10-year program of expansion. If he sees it through, he will be well into the retirement bracket (page 6A).

David Loeb, the cofounder of Countrywide and its resident technical genius, isn't interested in retirement either. Well past retirement age, he keeps on plugging away, working from one of his three homes around the country as he has done for many years.

How well are lenders handling their technology needs? Not very, according to Len Tichy, a senior vice president of Waterfield Mortgage. In a commentary (page 10A), he described the unsettling attitude of a majority of lenders that technology is an operational objective to be funded as needed, rather than a strategic necessity.

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