Mortgage Sector May See Mergers
Dow Jones Newswires</br></br>NEW YORK -- Consolidation may pick up in the U.S. mortgage industry, as companies seek to deal with a drop in refinancing activity after last year's boom.</br></br>Some smaller combinations so far this year -- including the $6 billion merger of Alabama-based Regions Financial Corp. and Tennessee- based Union Planters Corp. -- could herald a wider trend, analysts say.</br></br>"We're in a new phase in the mortgage industry right now, but it's a natural progression, given where interest rates are headed," said Sharon Haas, managing director in Fitch Ratings' banks group. "I am anticipating many more consolidations going forward."</br></br>Consolidation was under way well before the latest mortgage boom- and-bust cycle. But as the economy continues to recover this year, rates are expected to climb. That will erode new lending and refinancing activity, while pressuring firms to find new efficiencies, analysts say.