Wells & Norwest To Merge

Wells Fargo, which exited the mortgage business in April, is merging with Norwest Corp., Minneapolis, which owns the nation's largest residential lender/servicer.Because Wells has no mortgage division, Norwest Mortgage Corp. chief Mark Oman likely will have no competition for the top spot once the two commercial banks combine. In April the San Francisco-based Wells sold its $34 billion servicing portfolio and platform to GMAC Mortgage. Although some banks have been gobbling up mortgage assets during the decade, others have been exiting the business entirely. When Wells sold its servicing it joined other large banks such as BancOne, Barnett, First Bank, and National City that have exited the business over the past two years. Ed Elanjian, managing director of Cohane Rafferty Securities, Harrison, N.Y., told MortgageWire that some commercial banks don't like the high expense ratios that are involved in running a mortgage operation. He noted that some banks sell their mortgage divisions to make their expense ratios look better in preparation for a merger. At the end of March Norwest Mortgage was the nation's largest mortgage banker, with $212 billion in servicing. In the quarter NMC produced $20.9 billion in residential loans.