Merrill Lynch to Sell La Jolla Unit to Glenfed Corp.

LA JOLLA — Two days after it announced that it would get out of the real estate and home mortgage business, Merrill Lynch & Co. on Wednesday said it will sell its $3.1-billion residential mortgage portfolio and its loan servicing facility in La Jolla to a subsidiary of Glendale Federal Savings & Loan for about $52 million.

Glenfed Mortgage Corp. expects to complete its purchase of Merrill Lynch Realty’s loan portfolio and service center in the next month, company officials said. The acquisition will nearly double Glenfed Mortgage’s current $3.5-billion loan servicing portfolio.

The 134 employees at Merrill Lynch Realty’s 36,000-square-foot servicing facility in La Jolla will either be retained or offered “other positions in the company,” according to Roger Ritner, director of communications at Glendale Federal.

Glenfed Mortgage will not keep the Merrill Lynch Realty name, Ritner said.

George Cochran, senior vice president of Merrill Lynch’s La Jolla servicing facility, would not comment on the announced sale.

On Monday, Merrill Lynch said it would sell its real estate and home mortgage businesses, acknowledging that it could not be “all things to all people.” Proceeds from the divestiture are expected to reach at least $500 million, and will be reinvested in the company’s core ventures, such as global merchant banking, trading, securities underwriting and consumer markets operations.

Merrill Lynch officials said that Wednesday’s sale “is not related” to its earlier divestiture announcement.

Ritner said that Glendale Federal opened purchase discussions with Merrill Lynch Federal several months ago. The acquisition, he said, is a “definite enhancement and gives us the opportunity for other expansion.”

“We’re constantly looking for acquisition candidates to expand our operation, particularly in the real estate area,” Ritner said.

Merrill Lynch, in the real estate business since 1978, owns the nation’s third largest chain of realty offices, trailing only Century 21 and Coldwell Banker, a division of Sears Roebuck & Co.