Mortgage banks that originate home loans on behalf of other lenders or organizations have been thrown into a tizzy by Wells Fargo's announcement last week that it was leaving the mortgage originations business and would seek a third party to make loans on its behalf.
Such an arrangement could prove enormously profitable to the lender chosen by Wells.
"I am sure everybody is going to jump on that bandwagon, said Therese M. Albertini, vice president for business development at GMAC Mortgage Corp., Elkins Park, Pa.
Jim Ketchum, executive vice president, said last week that Wells was "talking with a number of potential alliance partners who would assume responsibility for originating first mortgages for the bank's customers."
A spokesman said the bank was looking to create the alliance with "a major national mortgage provider." He said it was important that the lender provide a full line of mortgage products and demonstrate expanded secondary-market capabilities, upgraded technology, economies of scale in loan processing, and high-quality service.
He said the bank would decide on a lender in four to six weeks.
Officials at Lincoln Service Mortgage Corp., Owensboro, Ky., and GMAC, two of the nation's most active affinity lenders, said they would pursue a lending deal with Wells.
Affinity lenders generally market home loans to members of a trade or professional group. An alliance with Wells could be one of the most lucrative in the nation for affinity lenders. It would also be unprecedented. Never before has such a large originator outsourced its lending. Last year, Wells originated about $2.7 billion in loans.
"Our concern is that we find an alliance partner that is able to meet the high service expectations of our customers," the Wells spokesman said.
Affinity lenders said the most likely candidates for a deal with Wells are Prudential Home Mortgage, Countrywide Credit Industries, and Norwest Mortgage Co.
Thomas J. Handler, vice president of corporate sales and marketing at Lincoln Service Mortgage, said Wells' originator would be forced to hire 50 to 100 employees to handle such volume.