Magazine article American Banker

Countrywide Forms Unit to Make Joint Originations with Realty Brokers

Magazine article American Banker

Countrywide Forms Unit to Make Joint Originations with Realty Brokers

Article excerpt

Countrywide Credit Industries is the latest -- and most noteworthy -- entrant into joint ventures with real estate companies to originate loans.

The Pasadena, Calif.-based mortgage bank has launched a unit to form such ventures. The unit, Countrywide Partners, will be headed by a top executive in the field, Terry Rowland, who has been hired away from Norwest Mortgage Co.

Known as controlled business arrangements, the ventures allow participants to legally share profits from originating mortgages.

The move marks the most significant vote of confidence yet for this approach to loan originations. Others in the industry say Countrywide will make an impact in the field.

"Anytime Countrywide is involved in anything in the mortgage business, it is a threat to everybody," said Andrew J. Courts Jr., president, Anchor Financial Group Inc., a Raleigh, N.C., mortgage bank that facilitates the arrangements on a smaller scale.

Income sharing was made possible last March when the Department of Housing and Urban Development amended the Real Estate Settlement Procedures Act. With loan volume elsewhere scraping bottom in the last six months, controlled business arrangements have become all the rage.

Late last summer, Norwest hired another top lender in this field from PHH US Mortgage Corp., Mount Laurel, N.J., partly to help the Des Moines lender create new lending arrangements with real estate brokers.

Mr. Rowland had been chief executive at Prosperity Mortgage Corp. …

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