Lincoln Service Mortgage Corp. of Owensboro, Ky., has been selected by Eastman Credit Union, based in Kingsport, Tenn., to offer mortgages to its 31,000 members.
For the last two years, PHH US Mortgage Corp., Cherry Hill, N.J., had the contract to originate loans for Eastman.
The coup by Lincoln is the latest development in the fight among mortgage lenders for affinity-lending relationships.
Lenders see such relationships - where mortgage companies market through membership organizations, offering special prices and service enhancements - as solid business in a lending market from which refinancings have all but disappeared.
Eastman's customers are mostly in Tennessee, South Carolina, and Texas.
Eastman is the 59th-largest credit union in the United States, with $455 million in assets.
A Productive Season
The new lending relationship should be operational within four months, said Bob Viers, vice president of lending at Eastman.
In March, several major affinity relationships were grabbed by lenders. Prudential Home Mortgage, Clayton, Mo., was signed on to originate home loans for the National Education Association, one of the nation's largest professional groups. And PHH was tapped to make loans for six affinity groups, including a credit union.
Tom J. Handler, Lincoln's vice president of corporate sales and marketing, was "very pleased" with the new lending arrangement with Eastman.
People familiar with the affinity lending scene say Mr. Handler has good reason to be pleased. The number of Eastman Credit Union members could make it a lucrative relationship, they say.
Experts say members of credit unions are more receptive to offers of financial services.
Lincoln's Growth Noted
In recent years, Lincoln has became one of the premier affinity lenders. It maintains more than 500 affinity relationships, which yield perhaps $2 billion a year, Mr. Handler said.
Lincoln also makes loans for three other major credit unions, he said.
Eastman chose Lincoln for its better price, said Mr. Viers of the credit union.
Lincoln will originate both Eastman's and its own loans. Lincoln will sell some of the loans it originates in the secondary market and funnel some to Eastman for its portfolio.
Mr. Viers refused to discuss Eastman's future relationship with PHH. But a person familiar with the industry said PHH "was dumped" for Lincoln.
PHH did not respond to requests for comment.
Mr. Viers said Eastman and Linsoln were working on establishing additional relationships. He said one area might be jumbo loan originations, for which Eastman has no affinity lender.
