The merger agreement between real estate giant HFS Inc. and direct marketer CUC International Inc. could mean more opportunities for HFS' newly acquired mortgage unit.
Terrence Edwards, president and chief executive of the unit, PHH Mortgage, said in a phone interview Friday that the merger would present it with new relationships to explore. The Mount Laurel, N.J.-based unit specializes in affinity lending,
The HFS-CUC deal was announced last week. HFS, which owns Century 21, ERA Realty, and Coldwell Banker, acquired PHH Mortgage from PHH Corp. on April 30.
PHH Mortgage has just started to coordinate its lending business with HFS' real estate brokerage activities.
This week PHH Mortgage plans to map out a strategy with CUC executives, Mr. Edwards said.
"Our strategies are similar," he explained. Both CUC and PHH Mortgage have relationships with hundreds of banks nationwide, he said. "Just as when HFS acquired us, this will increase the things we can do."
CUC, which markets consumer products, specializes in targeting customers through mailers, but PHH Mortgage doesn't plan to offer loans that way, Mr. Edwards said.
Business is already booming, he said. PHH Mortgage originated more than $800 million in loans in May, Mr. Edwards said, not including contributions from HFS' Home Mortgage Network. "We're at near-record volume" in an environment that doesn't include refinancing business, he said.
PHH's acquisition by HFS has provided the lender with an "entree into all the real estate brands," he said.
HFS' Home Mortgage Network, originally a joint venture between Coldwell Banker and PNC Mortgage Corp., was turned over to PHH this year. The computerized loan origination system makes loans through terminals in real estate offices.
It is expected to originate more than $1 billion in 1997, Mr. Edwards said.
In addition, PHH is conducting a pilot program to determine how to take advantage of HFS's real estate offices.
PHH has already seen success with its "Phone in, Move in" program, in which homebuyers call PHH directly from a real estate office, he said.
The company is experimenting with putting loan officers as well as computer terminals linked to PHH in its own real estate offices.
Mr. Edwards expressed optimism about the HFS-CUC merger plan. "This will be a huge success," he said.
