Intuit Inc. moved Thursday to gain credibility in the home loan business, announcing a deal to buy Rock Financial Corp. -- a Bingham Farms, Mich., lender -- for $370 million of stock.

The companies said Rock's Web site,, would be merged into Intuit's site six months after the deal closes in December and that Rock would be featured as a lender on the site in the meantime.

Word that Mountain View, Calif.-based Intuit intends to buy a mortgage lender came amid a flurry of on-line mortgage initiatives as lenders try to tap into the Web as a potentially powerful marketing tool -- and as the so-called dot-com companies try to wring profits from the new technology.

This week alone, IMX Exchange of San Ramon, Calif., added First Union Mortgage Corp. to its on-line mortgage trading network; Wells Fargo & Co. rolled out home equity loans on its Web site; and BNC Mortgage Inc. of Irvine, Calif., introduced a site to offer subprime loans.

Intuit's stock sagged $3.125 to $27, on news of the deal, but experts said acquiring Rock -- and a $6 million deal to buy title insurance and escrow service company, Title Source Inc. -- could give it a leg up in the mortgage business.

Noting that the price amounts to about 5% of Intuit's market capitalization, analyst Michael Moran of Raymond James & Associates said it remains to be seen whether the deal is significant enough to boost Intuit's earnings appreciably.

"Only time will tell if this line of business will add stability to a stock that has been all over the map and significantly off its high," Mr. Moran said. "It's not going to transform the company overnight, but it is potentially a solid addition."

The Quicken software has a customer base of 11 million but currently acts strictly as a referral site, sending loans off to 17 lenders for a small fee. Thursday's deal would enable the Intuit unit to fund loans as well.

"We had to get in this business more deeply, or not at all," said Bill Campbell, Intuit's chairman and acting chief executive. "Of course we'll aggressively market this, but we don't have to spend quite as much since we're not marketing a brand new name."

Daniel Gilbert, chairman and chief executive of Rock Financial, would become chief executive of QuickenMortgage. He said that Rock will continue to sell its loan servicing rights, leaving that function to "the big guys" and hoping that new on-line volume will be enough to offset a slow period in the mortgage origination business.

Rock Financial will continue to operate its remaining three branches in Detroit and its joint venture with Michigan National Bank.

Mr. Moran said the $370 million price tag is "a slight premium" to Rock's market value, "given existing activity. But that's completely meaningless, because you have to throw traditional valuations out the window with Internet plays."

Mr. Moran added that it is generally risky to make large technology investments, in hopes of an imbedded potential that may never be realized.

"With regard to any technology in its early stages, it is impossible to distinguish from cutting edge and bleeding edge," Mr. Moran said. "In a broad view, everyone would agree that the Internet is a natural channel in terms of mortgages. But only time will tell if Rock/Quicken will be the right model."

QuickenMortgage said it had no immediate plans to drop the lender network hosted on its site, but Mr. Campbell said that existing relationships would be "reevaluated."

"We don't anticipate much resistance with our lenders," Mr. Campbell said. The new QuickenMortgage model would sell funded loans to lenders' correspondent side in bulk, rather than refer loans individually to the retail side. "It's more volume and less work for them because they get loans already closed and packaged."

Rock said that it generated almost $90 million of revenue and closed over $2.3 billion in residential loans last year -- half of them conventional loans to fund home purchases. QuickenMortgage said users of its site took out about $1.2 billion in loans in its fiscal 1999, which ended July 31. Together, the companies said, they hope to become "a national on-line mortgage powerhouse."

Rock Financial's stock plummeted 26% in mid-May after it said earnings for the rest of the year would be lower than expected, and it has traded in the $15 to $20 range since then. Its shares were down 12.5 cents, to $20, Thursday.

Rock said its earlier shortfall was largely because of investments made to move its business on-line.

Intuit's stock has been volatile as well, particularly since the Sept. 23 resignation of its chief executive, Bill Harris.

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