In what could mark the return of brisk competition to the affinity lending business, participants have been engaging in frenzied bidding for a contract with the Columbia University Alumni Federation.
The group will sign on a lender to make home loans to its members within a month, according to sources involved in the bidding. Federation officials were unavailable for comment.
Columbia's alumni group, one of the largest in the nation, is believed to have more than 170,000 members. The group could not provide an exact number.
It is believed that most of the major affinity lenders have placed bids on the Columbia account. "We're on pins and needles," said one affinity lending chief at a major mortgage bank.
Some prominent affinity lenders are GMAC Mortgage Corp., Elkins Park, Pa., and Prudential Home Mortgage Co., Clayton, Mo.
Alumni groups have become one of the hottest targets of affinity lenders. Group members are considered to be loyal to their alma mater and thus more likely to act on sales offers, according to affinity lenders.
Last spring, affinity lenders signed new contracts nearly every week. But the deals have come more slowly in recent months.
Since May, only Lincoln Service Mortgage Corp., Owensboro, Ky., has landed a major affinity relationship. It signed the San Antonio Federal Credit Union in September.