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SHAWMUT NATIONAL CORPORATION ANNOUNCES FOUR-POINT MINORITY MORTGAGE LOAN INITIATIVE

 HARTFORD, Conn., and BOSTON, Jan. 21 /PRNewswire/ -- Shawmut National Corporation (NYSE:SNC) today announced a four-point initiative to decrease its denial rates for minority mortgage applicants.
 Eileen S. Kraus, president of Shawmut Bank of Connecticut, said, "The time for talk about decreasing the denial rates for minority mortgage applicants has passed. Today, Shawmut is taking action. We are announcing a four-point initiative that should increase mortgage applications and approvals for minority borrowers in the three states that we serve. The goal is to decrease our denial rates for minorities."
 Kraus continued, "Shawmut policy has always been to lend on the basis of ability and willingness to repay a mortgage, not the color of a borrower's skin. Nevertheless, we have recognized a need to do a better job of reaching minorities.
 "Since the nationwide differences in mortgage lenders' denial rates for white and minorities was first highlighted, Shawmut has taken a number of steps to increase home loans to minorities. Those steps have included the creation of a committee to review all potential denials of minority loan applications, new types of mortgages, and an outreach program within the minority communities.
 "We are making strides. In 1992, we approved more than twice asmany minority mortgage applications as we did in 1990. But further steps are needed to close the disparity in denial rates. We are confident that the steps that we are announcing today will make Shawmut a national leader in recruiting and lending to minority communities."
 Under the fout is expanding the availability of affordable mortgage products that respond to local needs. The more flexible underwriting criteria will include lower downpayment requirements, modifications to formulas for calculating an applicant's income, and less restrictive underwriting ratios.
 To fund these mortgages, Shawmut is committing $50 million over thenext two years in its three-state market area. Shawmut will holdthese mortgages in portfolio. In the past two years, Shawmut has committed more than $34 million in affordable mortgages targeted to low-and moderate-income families. In addition, Shawmut's Mortgage Review Committee, which examines all potential denials of minority mortgage applications, will be empowered to waive certain underwriting criteria, such as the requirement for private mortgage insurance, in certain instances and offer counseling on issues, such as cleaning up a credithistory.
 2. Expanding affirmative marketing efforts. Shawmut will increase the number of minority mortgage contactpersonnel and expand its homebuyer seminars in minority neighborhoods. It will also supplement its use of minority-oriented media in its advertising. In addition, the corporation will alter its incentive compensation package for its mortgage lenders. These changes should increase originations in predominantly minority and low-and moderate-income census tracts.
 3. Monitoring ongoing lending practices. Shawmut will continue to enrich and enhance its staff training on the Community Reinvestment Act and equal credit and fair lendinglaws and regulations. Shawmut also is implementing a "mystery shopper" program to ensure that minority applicants are being afforded every opportunity to qualify for a mortgage.
 In addition, Shawmut will designate an independent advocate who will look into complaints by applicants who are denied or are encountering difficulties in the application process. Applicants will be given the advocate's name and telephone number at the time of application. The advocate will report to the Shawmut National board of directors and the director of compliance.
 4. Expanding a mortgage pre-qualification program for borrowers in targeted neighborhoods. This program explains the mortgage application process to prospective homebuyers and helps them to determine for themselves the mortgage type and mortgage amount that they can afford before they sign a purchase agreement to buy a residence.
 Kraus concluded, "Shawmut always has set ambitious goals foritself, and this initiative is no less ambitious. To do less would betray our own ideals. I'm certain all Shawmut employees are enthusiastically behind this effort."
 Shawmut National, through its Shawmut Mortgage Co. subsidiary, is the largest residential mortgage originator in southern New England. In 1992, it originated $2.7 billion in new mortgages and serviced $5.5 billion in mortgages for its own portfolio andothers. Shawmut National Corporation is a leading provider of financial services to consumers, businesses, institutions, and public sector customers in southern New England.
 At September 30, 1992, Shawmut National had $23.2 billion in assets. The corporation maintains dual headquarters in Hartford and Boston.
 -0- 1/21/93
 /CONTACT: Robert L. Guenther, 617-292-2399, or Marjorie Seuss, 617-292-3239/
 (SNC)


CO: Shawmut National Corporation ST: Connecticut IN: FIN SU:

TM -- NE014 -- 7463 01/21/93 13:38 EST
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Date:Jan 21, 1993
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