Mellon Bank Corp. has launched a private-label residential mortgage business with PHH Mortgage Services of Mt. Laurel, N.J. The deal would enable Mellon customers to continue to obtain mortgages through the bank, even though Mellon has sold its home loan business.

PHH, a unit of Cendant Corp.'s mortgage bank, would originate and service all of Mellon's new loans, now that Mellon has sold its $55 billion servicing portfolio to Chase Manhattan Mortgage.

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