After successfully expanding into the student loan marketplace, Discover Financial Services has set its sights on another major milestone for American consumers: home ownership. Although the lender launched its mortgage business in June 2012, a new marketing campaign aims to link the home loan application process more closely to the company's cash back credit cards.

In a statement to reporters, company officials announced that Discover Card holders can earn a 5 percent CashBack Bonus on appraisal deposits placed before April 16, 2013. Account holders who take advantage of the promotion will see the bonus credit added to their balances within two statement cycles.

According to Discover Home Loans spokesperson Robert Smith, the lender wants to bring its proven track record for credit card customer service to the often confusing mortgage marketplace. Therefore, Discover has launched a secure website that offers 24/7 access to processing status updates. The company also assigns applicants a dedicated, licensed mortgage officer who oversees every step of the home loan process.

Discover has also established additional programs that can earn customers over $6,000 in rebates and rewards:

  • Through a partnership with Cartus Corporation, Discover offers rewards and discounts of up to $3,100 for mortgage customers who use a recommended personal real estate coordinator.
  • If Discover fails to close a home purchase on deadline, the company will rebate $1,000 toward closing costs.
  • Repeat customers can earn up to $2,000 towards lender origination fees as part of Discover's "Welcome Back Bonus."

The mortgage rebates and discounts complement rewards that Discover's customers enjoy on rewards credit cards and student loans. The Wall Street Journal's Andrew R. Johnson speculated in a published column that Discover's move into mortgages offers the company a way to build customer loyalty while potentially earning finance charges on closing costs and appraisal fees. The WSJ noted that Discover's bad debt rate hit an all-time low during 2012, forcing the lender to find alternate revenue streams to replace falling finance charges and penalty fees.

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