Elliman partners with Wells Fargo to form mortgage company
Aiming to make home loans easier to obtain in the midst of the credit crunch, Prudential Douglas Elliman has formed its own mortgage company.
In a joint venture with Wells Fargo, the brokerage firm has created a company known as DE Capital Mortgage to originate and fund mortgages, said Dottie Herman, president and CEO of Elliman.
This is the only arrangement of its kind among large residential brokerages in Manhattan, Herman said, adding that having an in-house mortgage lender will help make it easier for Elliman customers to get loans.
“It just makes everything go a lot quicker and smoother,” she said. “There’s no middle-man.”
Elliman has a 50 percent ownership stake in the new venture, as does Wells Fargo, and DE Capital Mortgage is an affiliate of both companies. Loans will be underwritten, processed and serviced by Wells Fargo Home Mortgage, and customers will have access to the same terms and programs that Wells Fargo offers in all of its locations. But they will effectively be getting their mortgages through Elliman. “When you get your mortgage, it’ll say DE Capital,” Herman said.
DE Capital will be able to write mortgages for other homebuyers as well, not just Elliman customers, Herman said, and Elliman customers still have the option of getting loans through other lenders.
Elliman previously had a relationship with mortgage broker Preferred Empire Mortgage Company. DE Capital will now replace Preferred Empire, according to Herman, who said she’s been considering such an alliance for months, ever since “the financial fiasco” this fall made mortgages very difficult to obtain and some banks stopped working with mortgage brokers, preferring to work directly with customers.
“I thought I had to do something,” she said. “I started looking around.”
Herman met with “seven or eight” banks before choosing Wells Fargo, which has similar alliances with brokerages in other cities, because she felt it was offering the most competitive mortgage products. Wells Fargo was not available for comment at press time.
Andrew Gerringer, an executive vice president at Elliman’s development marketing group, said the venture may help smooth the way for buyers in new developments as well.
“We’re starting to see some loosening up in the credit markets, so we think that this joint venture will give us a competitive advantage in the work we do with developers, and, of course, with the buyers,” he said.
Still, he conceded, it’s unclear whether the existence of DE Capital will make it any easier for buyers to get mortgages in new condos that don’t meet Fannie Mae presale requirements of 50 to 70 percent.
“That will be up to [Wells Fargo] on how they want to deal with the 50 to 70 percent pre-sale issue,” he said.
And DE Capital still faces a difficult credit environment, just like every other lender, Herman noted. Loans originated there will still take longer than they did in the easy-credit days of the mid-2000s, she said. Still, she hopes having an in-house team will streamline the process by eliminating the need for customers to shop different banks for the best rates, she said, and opening lines of communications between lenders, buyers and brokers.
“If there are any kinks [in the process], we’ll know right away,” she said. “It will be as quick as it can be in today’s environment.”