Prudential New Jersey Realty, East Brunswick, has formed a controlled-business arrangement with Associated Finance Corp., a Matawan, N.J., mortgage bank. In cutting the deal, the realty company joins a growing list of companies meshing realty and lending.

Prudential purchased an undisclosed amount of Associated shares in order to make the arrangement, said Scott Einbinder, the lender's president. The price was not given.

An Associated loan officer will originate home loans from Prudential New Jersey Realty's 10 offices, according to the companies. Associated will process the loans.

Mr. Einbinder said the new arrangement gives the mortgage bank an edge.

"We were on the outside looking in," he said. "Now, we are the inside looking out. We have an advantage just being there."

Interest has been increasing in such arrangements among small and midsize real estate companies since the Real Estate Settlement Practices Act regulations were eased earlier this year.

Most large real estate companies already have lending relationships established.

"You will continue to see more relationships like this one," said Robert Horner, of R.D. Horner & Associates, a Chicago consultancy operation.

Norwest Mortgage Co., Des Moines, has been actively pursuing smaller real estate companies with which to form joint lending ventures.

Mr. Einbinder said Associated was "basically just following the trend" when it made its agreement with Prudential.

He said Associated would originate $75 million to $80 million of loans this year. But he expects the new controlled-business arrangement to double Associated's loan production next year.

This year, Prudential New Jersey Realty will close about 2,250 real estate transactions worth $400 million, said William O. Keleher Jr., president. It was the fifth-largest real estate brokerage company in New Jersey in 1993, he said.

It operates as an independently owned member of the Prudential Real Estate Affiliates, a nationwide network of more than 1,200 real estate offices.

Mr. Keleher said the company had a lending arrangement with Prudential Home Mortgage Co., Clayton, Mo. In that arrangement, real estate brokers would recommend Pru along with a couple of other lenders to potential borrowers.

But Mr. Keleher was not pleased with the arrangement. He said most of the Pru originations process was done over the telephone and fax machine.

He decided to form his own controlled-business arrangement when Pru declined to place lending officers in the real estate company's offices, he said.

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