Unable to sell its mortgage unit at a price it deems acceptable, Cendant Corp., New York, has decided to spin off the division to current shareholders in an offering scheduled for the first quarter.Announcing the deal on Wednesday morning, Cendant chairman Henry Silverman noted that the parent company and PHH Corp. (the Cendant entity that houses Cendant Mortgage Corp. and a fleet division) will enter into a joint venture agreement whereby Cendant and PHH will split all profits on mortgages referred to CMC by Cendant's realty division. Mr. Silverman estimates that about 30% of CMC's production is sourced through Cendant-owned realty firms. Cendant values PHH Corp. (CMC and the fleet division) at about $1.2 billion. The mortgage unit, the nation's largest private-label originator, earns about $120 million a year after taxes. The spin-off announcement comes on the same day that one of CMC's competitors, Nexstar Financial of St. Louis, disclosed that it had landed a huge private-label client -- Morgan Stanley Dean Witter Credit Corp., one of the nation's largest retail brokerage firms [see next item]. (For the complete stories on CMC and Nexstar, see the Oct. 18 issue of National Mortgage News.)

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