Magazine article American Banker

Chase Manhattan in Talks to Buy Goldman Sachs' Servicing Unit

Magazine article American Banker

Chase Manhattan in Talks to Buy Goldman Sachs' Servicing Unit

Article excerpt

Chase Manhattan Corp., seeking to add again to its growing mortgage empire, is negotiating to purchase the assets of a mortgage servicing business controlled by Goldman, Sachs & Co., according to sources familiar with the deal.

Chase, acting through its Chase Manhattan Mortgage lending fund, was described by one source to be "close" to striking a deal to land Main Street Mortgage Co., a limited partnership controlled by the New York investment bank.

Main Street Mortgage, based in St. Petersburg, Fla., services about $3.5 billion in home loans, the sources said. Goldman officials declined to provide information about the unit's activities or assets.

Fred B. Koons, chairman Of Chase Manhattan Mortgage, declined to comment.

The deal would be the latest in a string of mortgage banking acquisitions by Chase over the last two years. Chase's interest is also further evidence of the strong drive to grow among top-tier mortgage banks.

Main Street Mortgage is solely a loan servicing company, with no production network. It is used by Goldman as a means to service various blocks of loan servicing rights that the investment bank obtains in the course of other business such as securitization.

The company was offered for sale several weeks ago, according to a source, and Chase quickly became the front runner. "I think that it is clear that Goldman does not have long-term ambitions as a loan servicer," said one observer.

Chase Manhattan Mortgage, based in Tampa, Fla., currently services $64.5 billion of home loans. This is up strongly from last summer, when the company serviced $47 billion.

Chase's servicing portfolio got a huge boost last summer when the bank plunked down $348 million to buy American Residential Mortgage Corp., a California-based lender with an $18 billion servicing portfolio and a far-flung network of loan originators. …

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