Chase Correspondents Keep Servicing Loans.(Chase Manhattan Mortgage)(Brief Article)(Statistical Data Included)

The refinancing market is so fierce that Chase Manhattan Mortgage here is seeing many of its correspondent customers hang onto their servicing rights.

"Many of our 'flow' servicing customers are now opting to sell to us in bulk," said Chase Manhattan Mortgage EVP Luke Hayden.

Mr. Hayden confirmed that the bank-owned mortgage lender has become more "disciplined" in its pricing of correspondent lending and "correspondent negotiated transaction" deals.

He said Chase's CNT business has fallen significantly, not because Chase is unwilling to buy flow servicing rights, but because "a number of customers have opted not to sell to us."

What's occurring at Chase is significant because the firm, historically, has been one of the largest buyers of flow servicing in the U.S. Over the past year, two major flow buyers, Bank of America and HomeSide, have left the market entirely.

Bulk servicing represents "existing" servicing rights (usually on somewhat seasoned product), where as flow deals involve an agreement to buy servicing, usually on a forward going basis, as the loans are being created.

In the second quarter, Chase's CNT deals fell by 84% to $5 billion, while its regular correspondent volume (which entails the purchase of closed loans) fell by 32% to $3.6 billion.