In its push to become a leader in home equity lending, the new Wells Fargo & Co. has put a veteran retail banker in charge of its efforts and enlisted the help of its 102-year-old consumer finance unit.

Last November, after Wells Fargo merged with Norwest Corp., the new bank named Doreen Woo Ho executive vice president in charge of consumer credit, including the new home equity group.

Ms. Woo Ho had joined Wells earlier in 1998, after 25 years at Citibank.

Three businesses from the Norwest side of the marriage were placed under the group's umbrella: Directors Acceptance, which originates subprime first mortgages; Norwest Direct, which makes first- and second-lien mortgages simultaneously; and Norwest Home Improvement, which makes Title I home improvement loans.

One result of the merger is that Wells no longer turns away home equity applicants with blemished credit.

Before the merger, Wells Fargo referred customers it turned down for home equity loans to Associates First Capital Corp. Now it is sending them to Norwest Financial, a consumer finance unit whose origins date to 1897.

Norwest Bank purchased the company, then known as Dial Finance, in 1982 and renamed it Norwest Financial the following year.

Over the years, the finance company has pursued vigorous cross-selling campaigns with other divisions of Norwest.

For example, Norwest Financial would give Norwest Mortgage a list of customers who rented instead of owned homes, so the mortgage company could market home loans to them.

In turn, the home loan unit would give Norwest Financial its own customer list-"a prime loan opportunity for us," said David Wood, chairman and chief executive of the finance company unit. One of Norwest Financial's main lines of business is financing consumer purchases of durable goods such as carpets, furniture, and appliances-goods that a homebuyer may very well need.

In fact, in some areas Norwest Financial has experimented with sharing office space with Norwest Mortgage, which has an extensive network of stores throughout the country.

"Our people are almost always in the branch," explained Mr. Wood. "A mortgage person is almost always out of the branch."

With Wells Fargo, "we are embarking down the same path" of cross- selling, Mr. Wood said. He said his company has had little difficulty assimilating into the new Wells Fargo because the old Wells did not have a consumer finance unit.

But cross-selling Norwest Financial products to Wells Fargo customers has proved tricky.

In California, which was the old Wells Fargo's chief territory but also is the state with the most Norwest Financial branches, some customers who have been referred by the bank to the finance company have been confused by the different names, Mr. Wood said.

"It might not be quite as easy to hand customers off," he said. "There's got to be some explanation. Who's this Norwest Financial? It doesn't work as smoothly" as referring a customer to a company with the same name, he said.

Because of this problem, management is thinking about renaming Norwest Financial after Wells, "or some variation," Mr. Wood said.

Norwest Financial has more than 1,000 stores nationwide, not counting its branches in Canada, Latin America, and the Caribbean.

Meanwhile, Ms. Woo Ho wants Wells Fargo to build the infrastructure and acquire expertise in sales, marketing, and risk management to become a leading provider of home equity financing.

"The merger has afforded us an opportunity to bring a higher focus and priority to home equity," she said.

Already, Wells Fargo's portfolio of home equity and subprime loans is $14.5 billion. Only Bank of America's portfolio is larger. Wells also has $20 billion of committed lines of credit that have not been drawn on.

Before the merger, Ms. Woo Ho analyzed the old Wells customer base and found that the bank had more success selling home equity to existing customers than to new customers. Some 80% of home equity borrowers had another relationship with the bank.

But, Ms. Woo Ho says, the bank could do a better job cross-selling home equity loans and lines to bank customers.

Sampling about half of the merged bank's 15 million customer households, she found that only 5.5% had home equity debt with the bank.

"The penetration rate for home equity is in our opinion quite low," given that an estimated 60% of retail bank customers are homeowners, Ms. Woo Ho said.

"We think there's a lot of opportunity to improve penetration among the homeowners within that 15 million."

She added that the bank was trying to identify Wells Fargo customers that have home equity loans or lines with organizations "that we'd like to 'win back' to Wells Fargo."

Ms. Woo Ho reports to Mark C. Oman, an executive vice president at the bank but best known as chairman and chief executive of Norwest Mortgage, the top originator of conventional loans and the second-largest servicer in 1998.

Norwest Mortgage services $250 billion of mortgages, in all 50 states, and Ms. Woo Ho said her group had several initiatives to cross-sell home equity lines and loans to that customer base.

Wells Fargo has a long tradition of home equity lending. Back in the 1970s, one of Wells' predecessor institutions, Crocker National Bank, was the first bank to offer home equity lines of credit. (Wells bought Crocker in 1986.)

But the San Francisco bank was seen as resistant to subprime lending.

Wells Fargo was said to have planned to create a specialty finance division in 1996, even going so far as to recruit executives from Household and Avco.

But, the story goes, the project was ultimately voted down by Wells' board, which opposed the planned unit's "storefront" strategy of setting up retail branches.

Between the consumer finance company, the mortgage company, and the bank, Wells Fargo's home equity businesses have 5,900 branches, Ms. Woo Ho said.

With all these different businesses in the Wells Fargo organization, Ms. Woo Ho aims to make the home equity lending process more "seamless" and convenient for customers.

"We don't want them to have to figure out, 'Which channel do I enter to get the answer or the product?'" she said.

For example, suppose a consumer with blemished credit who walked into a Wells branch was turned down for a home equity loan. Today, the loan officer would refer that customer to Norwest Financial.

Ideally, Ms. Woo Ho said, that customer should be able to get a final answer right there, "because they're eligible for a subprime offering, even though they're sitting in front of a banker who would normally sell a prime offering."

Wells Fargo's executives believe the meltdown of the home equity and specialty finance industries last year has benefited their bank. "We're moving toward where there are going to be fewer and larger players," Ms. Woo Ho said. "Banks like ourselves will be the dominant players of the future."

Unlike the many companies that crashed and burned last year, Wells is "not dependent on the securitization market as a key driver of our business," she said.

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