Despite heightened industry interest, new home lending arrangements between mortgage bankers and real estate brokerage companies have slowed.
Industry observers say most of the real estate companies interested in taking part in the origination of home loans are doing so. They also said real estate companies have soured on joint ventures.
"There are a lot of people who are not doing joint ventures," said George Eastment, executive vice president of Long & Foster, a real estate company that jointly originates loans with Des Moines based Norwest Mortgage Co.
Mr. Eastment said that instead, "scores and scores" of realty companies are settling up their own lending units --and fast, 'They don't want to give up half the business."'
Mortgage banks have been pushing to create joint ventures with real estate companies, especially now that loan originations have slumped as interest rates have climbed.
But takers have been few. Caldwell Banker Corp. was the last major real estate brokerage company to sign up in a joint venture with a mortgage bank.
The Mission Viejo, Calif., company signed on with PNC Mortgage, a unit of Pittsburghbased PNC Bank Corp, in August.
Brokers Say real estate companies have recently been suffering from declining profits. Mortgage banking is viewed by them as another source of income.
And more real estate companies are pursuing home lending. According to Real Trends, .a monthly newsletter for residential real estate brokers and owners, 46% of the 255 largest real estate compares maintained leading operations last year. That's up from 40% in 1992.
Observers say even more now have lending operations.
Mr. Eastment of Long & Foster said most large and regional real estate companies have formed mortgage operations. He said now mortgage units were even popping up at the smaller real estale companies.
"The smaller ones are tending to open their own shops," he said. "They don't want to give up half the business" to a joint venture partner
Sources say Norwest Mortgage is still trying aggressively to form joint ventures with real estate companies. A Norwest spokeswoman said she was unsure whether any new deals were in the pipeline.
Bob Homer, president of R.D. Homer & Associates, a Chicago consulting firm, said real estate companies have been leaning toward operating their own mortgage business because they thrive on their independence. And independent mortgage operations are generally more profitable than joint ventures.
But, he said, "there is no one way to go."
