NationsBank Acquires Three Mortgage Lenders in Pasadena

NationsBank Corp., the country’s third-largest banking company, announced its first foray into California on Thursday with the purchase of three small Pasadena-based mortgage banks.

NationsBank said its home loan unit, NationsBanc Mortgage Corp., bought Cypress Financial Corp., Rancho Santa Margarita Mortgage Corp. and RSM Funding Corp. Terms were not disclosed.

The three mortgage banks have combined loan portfolios of $1.3 billion and 22 offices scattered across Southern California and Arizona. By comparison, NationsBanc has a portfolio about 35 times that size.

Charlotte, N.C.-based NationsBank, a regional powerhouse, has been expanding nationwide and has said it wants to move into the West. Its purchase of the three Pasadena banks, all of which are owned by private investors, will allow it to begin making loans in California for the first time.

A sharp drop in loan demand caused by tepid home sales and the end of the refinancing boom has triggered a wave of consolidations and mergers in the mortgage banking industry. Large, out-of-state institutions have been pursuing many of Southern California’s smaller mortgage bankers in the hope of gaining a toehold in the vast but depressed market.

“We think Southern California and its real estate market have a bright future,” said Ellison Clary, a NationsBank spokesman.

The company has not yet decided whether any of the newly acquired offices will be closed, Clary said. Those that remain open will be renamed NationsBanc Mortgage in January, he said.