Magazine article American Banker

Mellon's $14B Mortgage Portfolio Would Expand GMAC's Presence

Magazine article American Banker

Mellon's $14B Mortgage Portfolio Would Expand GMAC's Presence

Article excerpt

General Motors Acceptance Corp. last week continued its efforts to build up its lending presence with a deal to buy Mellon Bank Corp.'s $14 billion commercial mortgage portfolio.

GMAC's commercial mortgage unit would have a $70 billion portfolio after the purchase, widening its lead over Midland Loan Services Inc., with $41.2 billion at yearend, and Amresco Inc., with $40.9 billion.

The deal is the fourth announced this year by the General Motors Corp. unit.

"Our charge has always been to help General Motors sell more cars and trucks," said James Kobus, a GMAC spokesman. "But our vision recently is to be the best brand in financial services, which is a much broader-spectrum goal."

With $289 billion of managed receivables in its auto and home lending units alone, and 24,000 employees worldwide, GMAC dwarfs most banks. The deals are indicative of its "full spectrum" approach.

On Feb. 2, GMAC said it would buy Stearns & Yerrall Inc. Realtors of Springfield, Mass. On March 2, GMAC said it would buy American Financial Consultants of White Plains, N.Y., and Triad Financial of Minneapolis, two subprime credit card servicers. And it said March 22 that it would buy Di-Tech Funding, an Irvine, Calif.-based lender.

The company also closed a $38 billion mortgage servicing deal this year.

"The auto group is a very mature market," Mr. Kobus said. "To continue growth, you have to diversify."

GMAC will definitely be making more acquisitions, he said.

Terms of the latest deal were not disclosed, but commercial mortgage bankers estimated that GMAC agreed to pay less than $100 million for the Mellon portfolio. Mellon had doubled the size of its portfolio in 1996 with a purchase of loans from Bankers Trust.

Since GMAC Commercial Mortgage was founded in 1994, it has grown rapidly through a series of acquisitions. …

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