Banco Popular North America, the mainland unit of Puerto Rico's Banco Popular, has hired Cendant Mortgage to process and service its home loans.
The parent Cendant Corp.'s three real estate franchises - Century 21, Coldwell Banker, and ERA - will also offer Popular loans as an option for homebuyers. The arrangement, announced last week, gives Cendant a piece of an expanding market.
"The Hispanic population is going to grow more than any other group in the U.S. in the coming years," said Terry Edwards, president of Cendant Mortgage.
The unit, which is based in Mount Laurel, N.J., will work closely with Banco Popular's 34 loan officers across the country to make sure the communities they serve are aware of the opportunities the alliance offers, Mr. Edwards said. The initial focus will be on the Miami and Orlando areas, he said.
Richard Smith, chairman and CEO of Cendant's real estate division, recently challenged Century 21, Coldwell Banker, and ERA to find a way to crack the Hispanic market.
Cendant was attracted to Banco Popular because of its name recognitionin the Hispanic community. Mr. Edwards said that, having grown up in New York, he knew that the Popular name "resonates with Hispanics."
"It screams 'trust,' " he said. "The success rate in the mortgage business goes up dramatically when consumers are working with a brand name they trust." While Cendant wanted to team up with a well-known brand name, Banco Popular wanted to focus its energies on sales and leave the processing of loans to someone else. Cendant, which handles back-office operations for companies such as U.S. Bancorp and Merrill Lynch & Co., was a good fit.
"Cendant has a very sophisticated origination system," said Don Simanoff, director of consumer lending for Banco Popular North America. "Their technology will allow us to service our customers better and make better decisions in mortgage origination."
The deal is unique for Cendant because it must provide bilingual service. Calls will be routed through both companies. Cendant has hired 20 bilingual employees, while Banco Popular's employees will work out of Orlando. (That is where the mainland unit's mortgage and U.S. card division is based, though Banco Popular North America is chartered in New York and has its executive offices in Chicago.)
Both companies will take applications over the phone, but Cendant will be responsible for all the back-office duties.