Over the past two weeks, three transactions have been inked, including one involving a competitor for real estate-secured transactions. But tough times in the mortgage industry have also been known to blow up deals, as companies exit the due diligence process with more questions about their partner than answers.
Here is a recap of M&A activity since the start of this month:
Fintech Lower teams up with Hamilton
Terms of the transaction were not announced. Hamilton will rebrand as Hamilton Home Mortgage, and its 500 employees, including President and CEO Patrick Sheehy and long-time
"We’re proud that Hamilton chose to join us, and we look forward to a bright future," Lower Managing Partner Michael Baynes said in a press release.
While most of Hamilton's branches are in Florida, it also has offices in North Carolina, Texas, Kentucky, Virginia, and Nevada.
"The synergies of the combined organization will expand our product and service offerings and enhance the exceptional experience we provide for borrowers and business partners," Sheehy added.
Credibly closes on home improvement financer ProApprove
ProApprove sources business through installment contracts with home improvement contractors. These loans compete with
"Through conversations with contractors who obtain financing from Credibly, we identified a significant market opportunity in the home improvement space," Ryan Rosett, co-founder and co-CEO of Credibly, said in a press release. "Contractors who offer financing solutions through ProApprove will no longer need to turn down sales due to a homeowner's inability to pay for a project upfront, helping those contractors grow their book of business."
Concurrently, Credibly and ProApprove reached an agreement to sell up to $350 million in newly originated home improvement receivables to Castlelake, an alternative investment manager.
"We are pleased to support the expansion of ProApprove's home improvement financing program at a time when there is increased demand for financing solutions from homeowners across the U.S.," Matt Little, partner, Global Specialty Finance and Business Development & Capital Markets at Castlelake, said in that company's press release. "We believe this transaction provides an opportunity to support a new product for Credibly in a historically underserved consumer market."
Doorway-Priority deal expands geography
An opportunity to expand their respective reach at a time when mortgage originations are slowing brought these parties together.
"We are thrilled about working together with Priority Mortgage, which will propel us into new markets in the Eastern U.S.," Matt Danilowicz, Doorway Home Loans CEO said in a press release. "Establishing an Ohio presence will balance out Doorway's West Coast high-balance production and expand operational support to our eastern-region teams."
The combination will be licensed in 30 states. Doorway has Fannie Mae and Ginnie Mae approvals.
"Our originators will now have access to a broader set of loan products to serve their borrowers," said Josh Hill, CEO of Priority Mortgage. "They will also be provided with an expansive set of industry-leading marketing, communications, and [point-of-sales] systems to grow and support their business and allow them to stay more connected with their customers and referral partners."
The company will now be branded as Priority Mortgage Team, Powered by Doorway Home Loans. Hill's new title is chief technology officer at Doorway. Priority's back office will be Doorway's strategic operations center for the Eastern U.S.
Terms of the deal were not disclosed.
Publicly-traded mortgage broker hires M&A advisor
"In order to take full advantage of the market opportunity and maximize shareholder value, we believe it's the right time to sell our portfolio of intangible assets, including Loans4Less.com, Federal Service Mark and 60 domain names,” said CEO Steven Hershman in a press release. "To attain competitive bidding amongst commercial and retail banks as well as financial institutions that specialize in lending programs we entered into a non-exclusive agreement with Dave Elias & Associates.”
Loans4Less is very thinly traded, with no shares changing hands on most days. It closed at 3 cents per share on June 14, unchanged since May 6. Its 52 week range is between 2 cents and 7 cents per share.
Some wish for the Feds to halt the Black Knight-ICE deal
For the first time, a mortgage industry trade group has come out strongly against the deal.
The Community Home Lenders Association, which represents small- and mid-sized nonbank mortgage originators, sent
The letter highlighted the horizontal concerns, as ICE owns the No. 1 loan origination system (with a 50% market share CHLA said), while Black Knight operates the distant No. 2 (10% share). It also picked up the vertical issue as Black Knight's MSP is dominant servicing technology used in the mortgage industry.
This transaction is expected to take at least one year to gain all approvals and be completed, so more twists in the saga are possible.
A highly-touted acquisition falls apart
"Due to the delays in closing coupled with continued momentum in other parts of our lending, payments and marketplace businesses, we have concluded with the Homebridge team that the merger will not go forward," Figure CEO Mike Cagney said in a posting shared with his company's staff. More specific details were not available.
But Homebridge will continue to work with Figure to expand its home equity line of credit business as well as "
Homebridge will also continue to integrate with