Norwest Mortgage Inc., capitalizing on a relationship it took over with its May acquisition of Prudential Home Mortgage, is pitching loans to American Express cardholders nationwide.

Fliers enclosed with September billing statements sent to millions of American Express cardholders promote Norwest's services as an "easy and convenient" way to get a home loan. Until now, the mortgage services have been marketed primarily to cardholders in 13 major U.S. cities.

The statement stuffers' pitch is that the entire mortgage application can be handled by telephone, and customers who close loans before yearend can get $150 cash back. Interested customers are instructed to call a toll- free telephone number to speak to a Norwest Mortgage counselor.

The mortgages are being marketed under the banner of American Express Financial Direct, a direct-marketing unit the company launched in May. In addition to mortgages, customers can buy a wide range of investments over the phone.

Norwest Mortgage is taking over an "affinity lending" program that Prudential Home Mortgage created in March 1995, after American Express decided to broaden its product mix to include home loans. Prudential beat out several other mortgage bankers, including Norwest, for the role of American Express' mortgage partner.

Prudential was the country's largest affinity mortgage lender before the acquisition.

For Norwest, based in Des Moines, the American Express alliance marks its first venture with a credit card company.

"The affinity lending expertise was one of the valuable parts of the Prudential transaction," said Dan Frahm, a Norwest spokesman.

Susan Miller, an American Express Co. spokeswoman, said the program has been chugging along without interruption since the deal was struck with Prudential. She said the change in ownership of Prudential Home Mortgages didn't disrupt the program. However, she declined to provide details on how much mortgage business American Express has captured.

Ms. Miller said that despite the statement-stuffer campaign, the mortgage program is still focused primarily on 13 test markets, where select customers are receiving direct-mail solicitations.

The test program, which began in Philadelphia and Chicago, was expanded in March to 11 more cities, including New York, Boston, Baltimore, Houston, and Dallas/Fort Worth. Ms. Miller said it is too soon to tell whether there is enough interest for a national rollout of the direct-marketing campaign.

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