Guild Mortgage acquires Cherry Creek Mortgage

Guild Mortgage is purchasing Cherry Creek Mortgage, making this the third acquisition by the San Diego-based public company in the span of four months.

The privately held lender, which has 68 branches covering 45 states, will help to expand Guild's footprint into reverse mortgage lending. 

"Cherry Creek …brings its experience assisting customers with reverse mortgages to Guild, providing an opportunity to expand Guild's range of services with new expertise for this important group of customers," said an announcement published by Guild on Monday.

Cherry Creek has been a long-time player in the reverse mortgage business. For the trailing 12 months ended February, it was the nation's 10th most active originator of Home Equity Conversion Mortgages, according to Reverse Mortgage Insight.

So far this year, it ranked eighth among program participants, with 100 total endorsements, down 46% from 186 for the first two months of 2022.

Other forward mortgage originators with significant market share of HECM activity include Ocwen, Fairway, Plaza Home and American Pacific Mortgage. 

Cherry Creek's branches will become their own division within Guild and will be headed by its former CEO Jeff May who ran the company for 36 years. Terms of the acquisition were not disclosed. 

May sees the acquisition as a "strategic offensive move" for his company.

"Guild's values, commitment to serving their associates, customers and the industry are perfectly aligned with what we have built over the last 36 years," May said in a written statement. "We believe the combined resources of both companies will make us a force in the marketplace and position our production teams to more readily compete and win for the long term in this challenging market."

Guild seems to be on course to continue growing, with Mary Ann McGarry, CEO of the company, noting a continued search for "potential new partners with strong local teams, a history of growth and community commitments." 

In December, the lender acquired Wisconsin-based Inlanta Mortgage, while in early February a purchase of Albuquerque, New Mexico-based Legacy Mortgage was announced. Both deals expanded Guild's regional reach and pushed Guild's ranking to fifth in purchase market share in Wisconsin and second in New Mexico.

This marks Guild's 10th acquisition since 2007, six of which were completed prior to its October 2020 initial public offering.

Guild Holdings, parent of the San Diego-based mortgage lender, posted a $15 million net loss in the fourth quarter, amounting to a decrease of 25 cents per share. Though full-year net income increased by 15.8% to $328.6 million compared to $283.8 for 2021

"Our model is built around a retail strategy, which focuses on servicing the loans that we originate," McGarry said during the company's earnings call. "By focusing on the purchase business, we see more consistency across interest rate cycles. And by originating our service volume, we believe our earnings are more durable and sustainable in all market cycles."

Guild's origination business also has a popular reputation among consumers. It was the No. 1 ranked lender in the 2021 J.D. Power customer satisfaction survey, and was tied for first in 2017.

In last year's survey it was tied for eighth but it was only five points behind the second ranked company, JP Morgan Chase.