It may look as if Wells Fargo & Co. has merely farmed out its mortgage originations to Norwest Corp. in the joint venture recently formed by the two banks.
But in a twist, Norwest will also be helping Wells to cross-sell other products to its mortgage customers.
The unusual arrangement emerges as a significant consideration in the agreement between the two banking companies to form the retail mortgage partnership.
The venture, dubbed Towne Square Mortgage, is majority-owned by Norwest and will use 100 loan officers to offer mortgages throughout Wells Fargo's 616 branches.
In addition to processing loans, the officers are charged with supporting Wells Fargo's products.
"We'll cross-sell as we can," said Julie Piepho, a Norwest regional executive who serves as president of Towne Square Mortgage.
Overtures will include distributing brochures explaining Wells Fargo products. Norwest may also go a few steps further to ensure that customer interest turns into transactions.
With effective cross-selling, "almost physically, you take the customer by the hand and walk them over to a personal banker," Ms. Piepho said.
Unless customers specify otherwise, loan officers can forward mortgage applications - complete with their raft of customer information - to Wells Fargo retail bankers for follow-up.
The arrangement has the potential to bolster Wells Fargo's deposit, checking, mutual fund, and lending programs.
But loan officers must be careful to not to cross regulatory lines by promoting products too vigorously, or violate the contract with Wells Fargo by talking up other Norwest products.
Norwest is taking pains to make sure the loan officers are adept at selling - and at putting customers' interests first, Ms. Piepho said.
The officers "must understand customer service," she said. And, through additional training, "we teach our sales rep to be more like a counselor."
The requirements may rule out traditional mortgage bankers, she indicated. In fact, one of the group's first hires was a copier sales person, who she said was well versed in the importance of being attentive to customers.
Ms. Piepho is also on the road, making presentations to Wells Fargo employees to make them comfortable with the team approach Towne Square plans to take.
Industry experts said the joint approach has merit, as long as the mortgage representatives and the companies are committed to the process.
"The real key is the quality of the marketing effort," said Allen Hardester, a consultant based in Columbia, Md.
The venture between Wells Fargo and Norwest fills a void that was created earlier this year when Wells Fargo got out of the residential mortgage business. Several other large lenders have abandoned single-family residential lending because of slim or nonexistent profit margins and the cyclical nature of the business.
Under their arrangement, Norwest mortgage products are used for all originations. Wells Fargo has the option of purchasing servicing rights for conventional loans, while Norwest will retain servicing of all government loans.