Some mortgage bankers are gleeful about the planned merger of Chase Manhattan Corp. and Chemical Banking Corp.
"I love it," said Donnell Smith, executive vice president at Market Street Mortgage, Clearwater, Fla.
"I can work more closely with my 120 people than they can with their 12,000," said Mr. Smith, whose company does business in the Southeast.
Mr. Smith and other mortgage bankers struck confident chords in the aftermath of last week's announced pairing of the two New York banking giants.
The combined operation, which would take the Chase name, would be a leading originator and servicer of mortgages. It would seem to have plenty of opportunity to grow - through 250 loan offices and the banks' considerable branch network.
Indeed, executives with both Chase and Chemical said the combined operation would be able to improve all business lines.
But some observers maintain that size isn't always an asset, especially when it comes to originations.
"The bigger they get, the more I like it," said Mr. Smith. "They won't be able to move as quickly as we can."
The new Chase would also be a giant in servicing loans, and would certainly maintain the latest technology to keep on top of the business.
But cutting-edge systems would arm the organization for battle, not equip it to roll over rivals, one consultant said.
"A lot of mortgage organizations would not be afraid to go head to head with the merged bank," said Charles M. Hebert, a principal with Ferguson & Co. in Irving, Tex.
Countrywide Credit Industries, GE Capital Mortgage Corp., and Norwest Mortgage are entrenched companies that might be able to capitalize as the new Chase got its house in order, observers said.
Deciding who would run the combined unit is likely to be one of the first orders of business. Recent months have seen both mortgage units lose top executives, so the choice for a new leader is not cut and dried.
Chase replaced Fred B. Koons with Richard A. Mirro, who was a senior executive with the mortgage group.
Chemical, however, has not yet named a replacement for David Frank, who came with the purchase of Margaretten & Co., Perth Amboy, N.J.
In addition to choosing a permanent executive for the top spot, the banks are expected to make staff cuts as a way of improving margins.
"After they lop off people, they will obviously be in a better position to service efficiently than either bank was alone," said Loyal V. LaPlante, director of mortgage bankers at Seroka & Associates, Brookfield, Wis.
