American Express recently announced it is moving into the mortgage arena, but no need to fear, Countrywide. Despite its 40-million customer base, Amex doesn’t seem terribly committed to the mortgage business. Rather, offering mortgages appears to be another gimmick to convince its on-line banking customers that it is offering a full line of consumer financial products.

For starters, Amex isn’t actually making mortgages. The company, which put its toe into retail banking two years ago with its online Membership Banking program, essentially will act as a lead generator for PHH Mortgage Service, Mt. Laurel, NJ. PHH will finance and process the loans. Amex will earn fees for any customers it sends to PHH, but a spokesperson declined to specify exact amounts.

"We will do all the marketing on the program," says Robin Korn, vice president of Membership Banking. And that effort appears to be quite feeble. There’s only a slim chance that many of Amex’s 40 million customers will ever know they can get a mortgage from the company (or from PHH through Amex). American Express is merely adding the mortgage offering to the services it offers on its Web site, and it declines to say how many people have opened banking accounts with it.

It has made similar arrangements with others. Amex last year linked up with PNC Bank to offer home equity loans, and with an online auto lender to offer car loans. The auto loan arrangement, with People First, is "strictly a marketing arrangement, the same as with PHH," says Korn. Regarding second mortgages, Amex will originate some of the home equity loans although PNC will do all the servicing.

So, for the moment at least, mortgage lenders have little to fear.


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