PNC Mortgage Corp. and Coldwell Banker Corp. are launching the nation's largest joint venture to sell residential loans to homebuyers.

More than 340 company-owned Coldwell offices will be offering mortgages by the third quarter and will be joined later by its 2,066 franchise offices.

Lenders have increasingly been forming alliances with nonbanks to get access to rich sources of potential borrowers. Prudential Home Mortgage, for example, recently signed a pact with American Express to market loans to its cardholders.

The alliances significantly reduce loan-origination costs and thus allow the lenders to do business profitably even in today's highly competitive market, experts say.

The PNC-Coldwell venture, dubbed the Home Mortgage Network, will originate about $3 billion of loans per year, said Saiyid T. Naqvi, president and chief operating officer of PNC Mortgage. "There is no reason we should do less," he said.

Early last month, Countrywide Credit Industries, Pasadena, Calif., hired a top executive away from Norwest Mortgage Co., Des Moines, to create controlled business arrangements with real estate companies and builders.

CBAs have been touted as the leading edge of home lending since the Department of Housing and Urban Development gave such ventures its tacit blessing last March. HUD ruled that the Real Estate Settlement Procedures Act allows lenders and real estate companies to share profits from loan originations by forming separate joint-venture entities.

Anchor Financial Group Inc., Raleigh, N.C., and PHH Home Equity Services, Overland Park, Kan., are among the most prominent outfits trying to set up CBAs among lenders, builders, and real estate brokers.

In August, PNC beat out more than 30 lenders for the right to sell home loans to Coldwell customers. Sears Mortgage, which was bought by PNC two years ago, had done business with Coldwell from 1989 to about 1992, when both were part of Sears, Roebuck and Co. The arrangement produced $3 billion of loans for Sears in 1992.

PNC and Coldwell have been ironing out the details of their new relationship since August, said Mr. Naqvi. He said some particulars of the program's rollout remain to be determined in certain states.

Donald K. Earling has been named president and chief executive of the venture. Most recently, he was executive vice president of the financial markets group at Clayton, Mo.-based Prudential Home Mortgage.

Mark Ulmer has also signed on to the new CBA. The former executive vice president at PNC Mortgage will reprise that role at Home Mortgage. In addition, he will be its chief administrative officer.

PNC also announced that F. Heather Danneker will join Home Mortgage as a vice president. The former employee of Old Stone Mortgage Corp. has been with Sears or PNC since 1990.

The CBA won't only tout PNC, Mr. Naqvi said. Instead, six to 10 lenders will be listed on a computerized loan origination system. Home Mortgage loan officers will use Coldwell offices.

The additional listings are "all about giving the consumer a lot of choices," Mr. Naqvi said.

Robert Horner of R.D. Horner and Associates, a Chicago consultancy, said selling the venture's services to Coldwell's real estate sales agents was Home Mortgage's greatest challenge. Giving the agents a choice of lender will help, he said.

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