Deal to Wed 2 Major Mortgage Lenders : Merger: Norwest of Minnesota will buy Riverside firm. Price is estimated at $250 million.

Minneapolis-based financial services firm Norwest Corp. said Thursday it has agreed to acquire Directors Mortgage Loan Corp. of Riverside, the nation’s largest privately held mortgage banker.

The companies would not disclose terms, but analysts had estimated a value of about $250 million for the deal, which was under negotiation for three months.

Directors will be merged with Norwest’s Des Moines-based Norwest Mortgage Inc. subsidiary, the nation’s fourth-largest home mortgage lender. Directors ranks 15th among U.S. mortgage lenders. As of Sept. 30, it held $4.7 billion in new mortgage notes and a mortgage loan service portfolio of $13.1 billion. The company operates in 25 states, but more than two-thirds of its business is in the West.

The merger will expand Norwest Mortgage’s lending and mortgage servicing business--particularly in the West-- said Mark Oman, president of Norwest Mortgage. It will also strengthen Norwest’s relationship with builders, he added.

“We’re very excited about the merger of Directors Mortgage with our mortgage banking business,” said Oman. “Directors Mortgage brings deep management strength, an operating philosophy consistent with ours, a proven track record and a tremendous reputation.”

Directors officials said they entered the negotiations with Norwest in September, to help them gain stability as mortgage banking undergoes “fundamental changes,” and because they felt Norwest would make a good match.

“Norwest brings Directors financial strength and the ability to weather the changing economic cycles,” said Directors Senior Vice President Robert Garman. “They have a proven commitment to retail mortgage banking, enhanced technology and a growing national market share.”

Garman said many Directors branch offices would continue to operate under the same name and that he did not expect the merger would result in any reduction in the company’s 2,000-person work force. Directors would also maintain its current management, Garman said..

Norwest Corp. with $56.6 billion in assets has interests in banking and insurance as well as mortgage lending among other financial services.