National City Corp., Cleveland, has agreed to buy Provident Financial, Cincinnati, for $2.1 billion in stock, a deal that will create the nation's eighth-largest subprime servicer.National City, which is also the ninth-largest prime lender, owns the fifth-largest subprime lender, First Franklin Financial of San Jose, and the 12th-largest subprime servicer, National City Home Mortgage of Pittsburgh. Provident's PCFS Financial Services unit has $10.7 billion in subprime receivables, ranking 14th nationwide, according to National Mortgage News. But among subprime funders, PCFS is ranked much lower, at 38th. (The rankings are based on third-quarter numbers.) Both banks have warehouse lending divisions that provide credit to nondepository mortgage bankers.

Subscribe Now

Authoritative analysis and perspective for every segment of the mortgage industry

30-Day Free Trial

Authoritative analysis and perspective for every segment of the mortgage industry