Sobered by the last refinancing boom, the nation's largest thrifts decided in 1995 to plunge into the fixed-rate market.

For more than a decade, most thrifts have stuck to making adjustable- rate mortgages to hold in their portfolios - a strategy aimed at earning interest income while guarding against swings in market rates.

But last year they decided they couldn't afford to sit out future fixed- rate lending booms, and began to offer 30-year fixed-rate mortgages. As at mortgage banks, the loans were intended for sale to the secondary market.

"We're trying real hard to be competitive in those product lines, and to get the word out to our realtors that they can come to us for things other than just (cost-of-funds index) ARMs," said Fredric J. Forster, president of Home Savings of America, Irwindale, Calif.

Mr. Forster said the thrift, which derives interest income from a $53 billion portfolio, wants fee income to bolster its bottom line. Income derived from servicing mortgages - including those sold to other investors - was seen as a natural fit.

Beyond that, thrifts were keen to retain their market share and keep their loan officers busy during periods when falling rates draw consumers to fixed-rate loans. But as 1995 progressed, thrifts continued to lag behind the overall market in fixed-rate originations.

Sam Lyons, senior vice president at Great Western Bank, Chatsworth, Calif., pointed to the "heart-wrenching discipline" of mortgage banking. Mortgage bankers originate every loan knowing that it has to be sold into the secondary market, he said.

"It's kind of like salmon swimming upstream - they know where they are going and what the goal is," Mr. Lyons said. By contrast, the focus at thrifts is divided between originating loans to hold in portfolio and to sell in the secondary market, making it more difficult to generate large fixed-rate volumes.

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