Wells Fargo Home Mortgage has signed a letter of intent to buy First Union Corp.'s portfolio of servicing rights on $52 billion of mortgage loans.
Buying First Union's servicing portfolio would boost Wells Fargo Home Mortgage's portfolio to $338 billion, making it the largest mortgage servicer. National Mortgage News ranked Wells No. 3 at the end of the first quarter, behind Chase Manhattan and Bank of America.
The Des Moines-based unit of Wells Fargo & Co. also intends to buy First Union's servicing center, which is based in Raleigh, N.C. Wells already has a servicing center in Charlotte.
First Union announced its intention to sell its mortgage servicing business early Monday as part of a larger restructuring. The sale agreement involving Wells Fargo was confirmed by First Union chief executive G. Kennedy Thompson during a conference call to discuss the restructuring. A spokesman for Wells Fargo Home Mortgage declined to comment Monday morning.
The Charlotte banking company also said it would discontinue the home equity lending operations of its Money Store unit and sell its credit card portfolio.
First Union said it expected the sale of the servicing portfolio and platform to close in the third quarter. First Union will continue to offer mortgages to its customers.