MOUNT LAUREL, N.J. - Few people know much about PHH US Mortgage Corp. And that is just the way that H. Robert Nagel wants it.

"One of our strategies is not to be known," says Mr. Nagle, president of the company.

PHH is a leader in affinity lending, a relatively new mortgage speciality that entails making mortgages to members of trade and professional groups and to relocating executives of corporations. These organizations, rather than PHH, do the bulk of the marketing to potential borrowers.

"If it weren't for legal reasons our name wouldn't appear anywhere. That is the culture of this company," he said.

The company, however, is becoming increasingly visible to rivals. From a relative shell 10 years ago, PHH US Mortgage has become one of the top 20 mortgage lenders, with $4.7 billion of originations. And it now stands on the precipice of even greater achievement.

Last month, United Services Automobile Association, or USAA, appointed PHH its sole affinity lender. Most bankers consider USAA, whose core market is military and ex-military personnel, to be the prime source for loans among affinity groups.

USAA was responsible for $1.1 billion of loans in 1994, according to the San Antonio financial services provider.

Meanwhile, PHH US Mortgage is starting to expand its affinity offerings beyond mortgages - to products as diverse as software and discount telephone cards. And it is looking into purchasing the affinity lending unit of its biggest competitor, Prudential Home Mortgage Co., Clayton, Mo. That would greatly change the landscape in this nascent industry.

PHH is by most accounts - there are no official figures - the nation's second-largest affinity lender, after Pru. So far this year, it has originated $1.82 billion of loans. PHH is also a major servicer; at yearend it was processing monthly payments on some $17.3 billion of loans.

PHH Corp., a Hunt Valley, Md., financial services concern, entered the mortgage business in 1984 by acquiring US Mortgage.

Initially, the company was too small to compete with the big-time players, Mr. Nagel said.

"We basically bought a shell in 1984," he said. "It had a good location and a good work force. (But) it didn't have the engine to do what we wanted."

He said PHH executives "putzed around" with the company for a few years before deciding to carve out a niche in affinity lending. The idea was to simply avoid competition with the bulk of the mortgage industry.

The company says it now has hundreds of clients, though it will not release a precise count. Some of its affinity group clients are among the largest in the nation. Besides USAA, the company originates loans for CUNA Mortgage Corp., the AFL-CIO, and a 1.6 million-strong nursing group, among others.

In fact, he said, the company now has so many clients that it must take care to avoid conflicts with groups that compete with each other.

He cited clients Shell and Amoco as an example. "We don't want to give a product or rate to one and not the other," he said. With that in mind, rates for clients are "neutral," he said, meaning that they don't vary between clients.

A 51-year-old former accountant, Mr. Nagel eschews tradition. He rarely attends trade group conferences; he is not a schmoozer. He doesn't even wear a suit to work on many mornings. However, he and others say, he runs the company with a firm hand.

Right now, Mr. Nagel's main objective is eliminate the peaks and valleys of loan volume that rule most mortgage banks.

"I can't build a business on whether interest rates are going up or down," he said.

He is attempting to remedy that problem by offering new products to its client affinity groups. Besides home loans, PHH now offers affinity group members software, credit cards, home equity loans, Drivers One cards - which are similar to an American Automobile Association of America card - and discount cards.

Mr. Nagel is also exploring other ways to make mortgages.

The company is a charter participant with Virtual Realty Network Inc., a Newport Beach, Calif., company, in an attempt to originate loans via new video teleconferencing technology.

It is considering ways to use the Internet to make loans. And the company continues to develop a huge network of real estate brokers to whom it refers home buyers. The idea is to put PHH into the position of originating a loan, Mr. Nagel said.

On the whole, Mr. Nagel says, the mortgage industry must do a better job of getting closer to the customer. For example, lenders should not alienate real estate brokers, he argues. Rather, they should embrace them as one path to greater access to potential borrowers.

"You can't make anyone do anything," he said. You can only position your mortgage bank to be there at the moment a borrower decides to take out a loan, he said.

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