At a row of desks in a New Jersey office park, a loan consultant greets a caller seeking a mortgage from U.S. Bancorp. Across the room, another loan officer fields a call from a Merrill Lynch customer.

Both work for Cendant Mortgage, a unit of Cendant Corp. that has quietly become a major force in the mortgage market, largely on the strength of its telemarketing unit.

In what looks more like a high-tech bond trading floor, Cendant has set up a home loan factory. Teams are allocated to serve the clients of institutional customers, including U.S. Bancorp, USAA (United Service Automobile Association), First Maryland Bancorp, and Merrill Lynch & Co.

"We want to be the back office to great names," said Terence W. Edwards, president and chief executive officer of Cendant Mortgage.

The company can adjust the service it provides, depending on how much business the client wants to do with its customer. Some originate loans through Cendant's "800"-number telemarketing operation, and others use the operation to sell loans to Cendant.

More than half of Cendant's retail business comes through the telemarketing channel, said Robert C. Andwood, senior vice president for sales and account management.

ICBA Mortgage of Arlington, Va., for instance, has created a variety of ways for 900 community bank members to work with Cendant Mortgage, said Michael Hindman, president of ICBA. The partnership resulted in $1.2 billion of originations in 1998, he said.

The two factors most appealing to these community bankers, he said, are that Cendant will not cross-sell to the bank's borrowers and that it will not sell the servicing.

Cendant Mortgage, formerly known as PHH Mortgage Services, is one of several companies using an "800"-number marketing platform, said Richard Beidl, an analyst at Tower Group in Needham, Mass.

"There are very distinct customer segments, and different channels will appeal to different segments," he said. Some want face-to-face contact, others prefer the phone or the Internet.

Mr. Beidl predicts that the marketplace will have room for the Web, "800" numbers, financial transaction kiosks, and in-branch loan officers. Most customers, he said, prefer to use a combination of channels.

Cendant Mortgage has been one of the star performers in the real estate division of parent company Cendant Corp. Cendant and its stock have been working their way back to recovery after Cendant reported accounting irregularities in the former CUC International Inc.-the company that merged with HFS in 1997 to form Cendant.

Cendant Mortgage operates as a private-label back-office operation for outside clients. It operates under its own name in its relationship with the three real estate franchises owned by Cendant Corp.-Century 21, ERA, Coldwell Banker. It also has a Web site and a wholesale operation.

Cendant was ranked by American Banker as the 10th-largest mortgage originator in 1998. The company reported 1998 originations of $26 billion. In the first quarter it originated $6.78 billion, and its servicing portfolio was $46.77 billion as of March 31. The mortgage unit has 4,630 employees and plans to increase that to 6,000, many of whom will be housed in a new C-shaped building nearing completion.

Though Cendant Mortgage does not cross-sell products to its clients' borrowers, it benefits from cross-selling relationships with Cendant Corp.'s three residential real estate brokerages.

In the first quarter the mortgage company originated $900 million in telephone originations to Century 21, ERA, and Coldwell Banker, and $780 million was generated through on-site loan officers or sales of loans to Cendant Mortgage.

The mortgage unit has "Wal-Mart-style" buying power, Mr. Edwards said, adding that it can cross-sell products related to the home buying process if business partners consent.

The mortgage company tells its clients to expect top performance. "Pretend you own us," Mr. Edwards tells potential clients.

Some of Cendant Mortgage's clients have the financial clout to take these remarks to heart. Indeed, many partners may prefer to keep the relationship under wraps, said Mr. Andwood, who finds clients and handles existing relationships.

Whether Cendant Mortgage operates in a stealth mode or in the open, the company earns a fee for its work and pays its clients a premium on each loan.

"We're playing to their strengths, which is selling and accessing their customer base," Mr. Andwood said. "We bring the operation to the table." Another advantage, he said, is that companies pay only when Cendant is processing a loan for them; in a down market, a company does not have topay salaries for idle originators or closers.

"When they're unencumbered about concerns over their own internal operations, they really do become originating machines," he said.

To provide service to many different clients, Cendant Mortgage focuses on teamwork. At the base of the staircase leading up to the second-floor office of Mr. Edwards, a sign cautions, "Only team players beyond this point."

A mission poster hangs on a wall in his office and on countless other walls at Cendant's facilities: "We promise to treat customers like family- while providing financing for the American dream. The experience will be smooth, easy, and at times fun. We will do this with unequaled passion."

Consumers are focal points because they are customers of Cendant's business partners. "It's their customer for life," Mr. Edwards said.

Though some mortgage bankers believe that close face-to-face relationships keep customers coming back, Cendant takes a different approach to mortgage lending.

In a typical scenario a customer in a bank branch would be given an "800" number that connects him or her to a mortgage specialist at Cendant.

The "800" number "keeps everything private and confidential," Mr. Edwards said.

The Cendant mortgage consultant or loan officer interviews the potential borrower and enters data on the home and borrower into Cendant's own software origination system.

A typical conversation with a customer lasts only 20 minutes, said Jane Durgin Hoffmann, vice president for origination. Cendant earns money by charging a $325 application fee, paid over the phone using a credit card, plus closing costs.

Loans are submitted simultaneously to loan buyers Fannie Mae and Freddie Mac so that Cendant keeps its delivery options open, Mr. Andwood said.

The customer then receives a good faith estimate via fax and is mailed a packet with additional documentation that requires the homeowner's signature. The customer returns the documents to a counselor or underwriter for approval.

Cendant's goal is for "real-time call handling," Ms. Hoffmann said, so when a customer calls, questions can be answered by other members of the team handling the business of a given partner. Computerized information is accessible to anyone on the team, Ms. Hoffman said.

Up to 10 people work in the counselor teams at Cendant, handling accounts for different Cendant partners.

The counselor acts as the "quarterback" for the transaction, said Donald J. Casey, senior vice president for operations. Counselors coordinate the processing and the relationships with vendors who provide credit, flood insurance, title insurance and other services, he said.

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