Magazine article American Banker

Lenders Fight to Sign Affinity Groups

Magazine article American Banker

Lenders Fight to Sign Affinity Groups

Article excerpt

The quest for mortgage business through affinity groups has become like mud wrestling.

More lenders are now seeking out alliances to originate home loand than at any time since Prudential Home Mortgage Inc. formed the first marketing relationship with a membership group in 1988.

The competition for such arrangements has gotten very intense, with lenders trying to woo associations away from existing ventures while closely guarding their own client lists. Some are also adding staff to cultivate new relationships.

North American Mortgage Co., Santa Rosa, Calif., PHH US Mortgage Corp., Cherry Hill, N.J., and Countrywide Funding Corp., Pasadena, Calif., are making major thrusts toward large trade groups and and other associations.

"I see it as a burgeoning source of business for the industry," said Peter A. Justen, first vice president in Countrywide's consumer division.

Doctors and Dentists

Countrywide signed its first affinity group, the California Dental Association, in July 1993. Since then, the lender has signed contracts with the Seatle-King County Dental Society, the Texas Dental Association, the California Medical Association, and the Dental Scoiety of the State of New York.

Countrywide has also reached agreements with the Florida Dental Association and the Massachusetts Dental Society but has not yet completed formal contracts. The lender also has contracts pending with two other state dental organizations, a group of physicians, and a group of optometrists.

Conflict Ahead?

"Do I think this will be a high-growth area? Yes," said Mr. Justen.

But one source who heads a major lender's affinity group orginations said the Prudential and Countrywide could be at loggerheads in their marketing efforts, with each promoting their loan products to the same people. …

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