Chase to Lend Through Big Realty Firm's Offices

Chase Manhattan Mortgage Corp., New York, is diving into point of sale originations via an alliance with Remax International.

Remax, based in Englewood, Colo., is a real estate franchise network with offices in all 50 states. The company reportedly sold about 200,000 homes last year and is one of the top four agencies in the country.

Point of sale originations, in which a lender is linked with a realty office to capture borrowers while they are buying a home, is an idea whose time has come, said Weston Edwards, who heads his own Laguna Beach, Calif.- based real estate consultancy. "All the major mortgage players have been thinking about how to do this."

Many other lenders have approached Remax with affiliation proposals, Mr. Edwards reported. The company is known for its independence, he said, in part because of its unusual agent compensation setup. Remax gives agents 100% of the commission from every sale they make in exchange for a flat monthly fee for overhead.

The Chase deal is the realty company's first entry into affinity marketing with a mortgage lender, said Dave Westfall, executive vice president at Remax.

Details of the arrangement are still being worked out, Mr. Westfall noted. He said he expects both companies to have a firm idea of how the alliance will work by summer's end.

A Remax representative said the two companies are discussing "unique" ways of persuading homebuyers to use Chase's services.

The venture could be hugely profitable for Chase, Mr. Edwards said. "If they manage to capture 30% of Remax's transactions, that could mean several billions of dollars," he estimated.

Although 30% would be a high proportion of home purchases for an affiliated mortgage company to finance, "it is done by some firms today," Mr. Edwards said.

The exact number of home sales made by Remax agents in 1995 cannot be disclosed, Mr. Westfall said, because a lawsuit on the subject is being settled. Remax is defendant in the suit by Century 21 Realty, Parsippany, N.J.

Links between local real estate offices and bank branches or mortgage companies are nothing new, but most major lenders are just beginning to try for similar alliances on a national level.

PNC Mortgage Corp., Vernon Hills, Ill., was a trailblazer with its Home Mortgage Network, which links the mortgage company with Coldwell Banker realty offices nationwide.

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