With the addition of Chris Flanagan, Ralph Diserio and Ryan Asato - all former Merrill Lynch mortgage pros - underwriter Chase Securities is ramping its real estate-related businesses, said market watchers.

"I think they've had some trouble penetrating the mortgage underwriting side," one source said. "They've hired some good people for the research end, and that will help them develop a presence and make investors more comfortable. I think it's something that they may have to further staff up in, however."

"We don't have any precise gameplan," said Andy Tuck, spokesman for Chase. "It's just part of building our overall capabilities in the overall ABS sector."

Flanagan headed the real estate ABS research group at Merrill, while Diserio was director of the ABS and mortgage-backed securities research group. Asato served as a vice president in Diserio's group.

The Merrill hires follows a play for former Credit Suisse First Boston research head Karen Weaver, who eventually followed the rest of her team over to Deutsche Bank Alex. Brown. Weaver, a contributing author to several structured-finance "handbooks" - two of which focused on mortgage-related product - would also have pushed Chase's mortgage credibility, the source said.

Also recently added to the mortgage firepower at Chase, Kevin Finnerty joined in November to head up the mortgage-backed securities trading team. From Donaldson, Lufkin & Jenrette, Chase added mortgage-backed players Bob King and Alan Galishoff.

Most recently, Chase nabbed mortgage sales kingpin Lawrence Doyle from Banc of America Securities.

According to data supplied by Thomas Financial Securities Data, home equity has been responsible for just 7% of Chases' business since 1995.

An interesting side note, naming Flanagan head of ABS research creates an awkward, somewhat delicate situation in management, according to several sources familiar with the situation. Managing Director Tom Hourican has for some time been considered the "head of ABS research" over at Chase.

"It's kind of an interesting political situation with Tom Hourican," one source said. "It's hard to tell what's going on there, but I think it's pretty safe to say that something is."

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