PNC Mortgage, a unit of PNC Bank Corp., plans to form an independent joint venture with real estate broker Coldwell Banker Corp. to offer a multilender mortgage origination service, both companies announced Tuesday.
As a result of the joint venture between the Illinois-based mortgage company and the Mission Viejo, Calif.-based Coldwell, customers will be able to shop for a home and evaluate mortgage loan options from local and national lenders in most of the more than 300 company-owned Coldwell offices.
The multilender aspect of the venture appears designed to satisfy rules drafted by the Department of Housing and Urban Development under the Real Estate Settlement Procedures Act, which is aimed at combating kickbacks by mortgage companies for loan referrals.
This is not the first time Coldwell has had a relationship with the mortgage company. Coldwell, when it was owned by Sears, Roebuck and Co., was a source of referrals for Sears Mortgage, which was bought last year by Pittsburgh-based PNC.
"It's a natural progression of the mortgage banking business," said Morgan Stanley & Co. analyst Dennis Shea. The major point of sale for mortgage banking iS going to be the real estate broker, he added.
Coldwell executive vice president Greg Campbell said the company looked at more than 30 leading mortgage lenders in a review that began early this year.
The 50-50 joint venture, expected to become operational next year, will have a board of directors that is independent of both companies.
It will also have its own managerial, administrative, and operational staffs.
A search for a chairman is under way. PNC Mortgage, which funded $3.9 billion in residential mortgage loans in the second quarter, services about 530 000 loans
