SEATTLE--Boeing Co.'s approach to its residential lending program for employees is strictly low-key. This puts Boeing poles apart from PHH US Mortgage Corp., Mount Laurel, N.J., and Lincoln Service Mortgage Corp., Owensboro, Ky., which run the program for Boeing.

They and other lenders are high on affinity lending with companies like Boeing because they believe it can provide a more reliable stream of loans than other means of mortgage origination.

Boeing, for its part, considers the program a service, not a moneymaker.

The different attitudes toward affinity lending provide insights into what lenders must do to make such relationships successful.

Education Is Primary

"I am frankly not concerned about where employees get their mortgages," said Peter M. Leslie, Boeing's manager of employee relocation and housing affordability. "I am more concerned about them getting the information and education."

But most affinity lenders would do anything for a lending relationship with Boeing. Its 130,000 employees and frequent staff relocations make it appear a potential treasure chest of home loans. And other companies have been actively courting Boeing for a role in its lending program.

Last year, though, the aerospace giant produced only about 200 loans for its two affinity lenders, Mr. Leslie said. An affinity lender at a major West Coast mortgage company said Boeing should have yielded 1,300 loans, considering its size.

Exploiting the Potential

Lincoln's Tom J. Handler, vice president of corporate sales and marketing, looks at Boeing's and similar corporate lending programs as an evolving business. The challenge of lending to corporate employees is to make the loan deals more attractive.

He emphasized that, like other lenders, Lincoln is dedicated to affinity relationships with corporations. He said the potential is there for hearty originations.

PHH executives were unavailable for comment.

Program Started in '92

Mr. Leslie said Boeing's affinity lending program grew out of its active relocation operation, which moves about 400 employees a year.

The Housing Affordability Program, or HAP, begun in 1992, offers only a small selection of fixed-rate loans. Adjustable-rate mortgages are available upon consumer request.

Mr. Leslie hinted that Boeing may soon expand the program to include a complement of ARMs.

The program does offer some unusual down payment methods. Boeing employees can tap into their 401(k)-like benefit program, called the Voluntary Investment Plan, or borrow from pools of hardship funds for a down payment.

HAP is completely voluntary. Mr. Leslie said it is designed to make homeownership possible for employees, offer useful information, and prevent unnecessary withdrawals from the Voluntary Investment Plan.

One of the program's main accomplishments, said Mr. Leslie, was increasing distribution of a handbook on residential lending last year.

The affinity lender at the major West Coast mortgage company said many corporations are looking for a "no-surprises sort of relationship" with mortgage banks. He said the last thing a company wants to hear is complaints about a loan program that was designed as a service.

"I think in the lending business there is a real question of how much business this can obtain for the national lender," Boeing's Mr. Leslie said. "I think in that regard the jury is still out."

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