Cendant ( CD), the consumer-services conglomerate, is having trouble unloading its mortgage business, and some observers think it might be out of luck if Countrywide ( CFC) ends up taking a pass on the billion-dollar portfolio. An investment banking source said the country's two biggest financial services firms, Citigroup ( C) and J.P. Morgan Chase ( JPM), recently took a pass on Cendant's mortgage lending operation. Cendant, the source said, hired Goldman Sachs ( GS) last year to find a buyer for the operation, which is the nation's 10th-largest residential lender. In December, National Mortgage News, an industry trade publication, first reported that Cendant had put its mortgage business on the block. Cendant is looking to get out of the mortgage business because it doesn't consider it a core part of its business. Cendant also owns Avis rental car, the Century 21 real estate business and Ramada Inn, among other properties. Cendant's difficulties could work to the advantage of Countrywide, the big mortgage banker that many now see as the most likely buyer. The Calabasas, Calif.-based lender is a logical acquirer given the firm's aggressive growth targets and recent comments about its receptiveness to making acquisitions. In fact, the mortgage banking community has been buzzing for weeks with speculation of a deal between Countrywide and Cendant. Such a transaction would be a big step for Countrywide, which has tended to avoid large acquisitions throughout much of its 36-year history. A Cendant spokesman did not return telephone calls. A Goldman Sachs spokeswoman declined to comment. Rick Simon, a Countywide spokesman, said he wouldn't comment on speculation. But he reiterated that the company is open to making acquisitions. In recent months, Countrywide executives have spoken openly about the possibility of acquiring smaller competitors. In a conference call earlier this year, Countywide Chairman and CEO Angelo Mozilio said, "There may be some unusual acquisition opportunities, and we are opportunists; by our very nature that is what we are."