WMC MORTGAGE OKS DEAL WITH RIVAL; NORWEST TO EXPAND CALIFORNIA PRESENCE.

Byline: Deborah Adamson Daily News Staff Writer

WMC Mortgage Corp., a direct mortgage banker headquartered in Woodland Hills, is selling half of its lending operations to a major competitor, the companies announced Monday.

Norwest Mortgage, the nation's largest originator of home loans, is buying 46 retail branches and two wholesale centers from WMC, but not the portfolio of prime ``A'' loans already generated by those offices. That portfolio remains for sale, WMC officials said.

In addition to its San Fernando Valley headquarters, area WMC branches being sold are Valencia and Sherman Oaks sites.

Norwest, a subsidiary of Minneapolis-based Norwest Corp., expects to keep the majority of WMC's 700 employees at the 48 locations.

Norwest's ATI Title Co. subsidiary also bought WMC's Spring Mountain Escrow Services, which provides loan closing services. WMC Mortgage will continue to operate WMC Insurance Services.

Carl Geuther, WMC's chief financial officer, said the company will emphasize its sub-prime lending business. Sub-prime loans are those below ``A'' quality, taken out by those who have credit problems.

``Our sub-prime business has been growing very rapidly,'' he said. ``We want to focus primarily on that business.''

In 1997, $2.9 billion out of almost $5 billion in loans at WMC came from the prime lending side.

James Schutz, senior banking analyst at ABN Amro in Chicago, said he expects Norwest to continue acquiring mortgage bankers. Norwest already is a significant player in the Southern California market, he said.

``It's a scale business,'' he said. ``It gets more profitable the larger you are.''