Guild acquires small retail lender Legacy Mortgage

Acquisitive lender Guild Mortgage on Tuesday introduced the acquisition of Legacy Mortgage, growing its footprint within the Southwest.

Publicly traded Guild is selecting up Legacy’s 13 branches throughout 4 Southwest states – Arizona, Colorado, New Mexico and Texas.

Phrases of the deal weren’t disclosed.

“This acquisition is a part of the corporate’s continued plan to develop each in current markets and by getting into new ones with selective acquisitions of like-minded lenders,” Guild CEO Mary Ann McGarry mentioned in a press release. “Legacy Mortgage not too long ago celebrated its 20-year anniversary of offering residence financing and our workforce has at all times admired the corporate’s dedication to its workers and clients… Our mixed strengths will drive additional progress all through the Southwest.”

Legacy, headquartered in Albuquerque, New Mexico, was based in 2002 and bought by its CEO Jack Thompson in 2006.

The lender originated roughly $309 million in mortgages in 2022, in accordance with knowledge from mortgage expertise platform Modex. The corporate has 39 lively mortgage officers throughout its retail branches, in accordance with Modex knowledge.

By becoming a member of Guild, Legacy mortgage officers can supply further mortgage merchandise and specialised mortgage packages.

“Shoppers can even profit from entry to new digital and buyer relationship instruments that enhance each step within the lending expertise, together with servicing, a Guild energy for many years,” Thompson mentioned in ready remarks.

The acquisition is Guild’s second pickup within the final three months. Guild acquired Inlanta Mortgage, increasing its presence within the Midwest. Phrases of that deal have been additionally not disclosed.

Per Inside Mortgage Finance knowledge, Guild was the twenty sixth largest mortgage originator in America in 2022, producing $19 billion in quantity. The distributed retailer’s quantity slipped to $2.7 billion within the fourth quarter of 2022 from $4.4 billion within the third quarter, IMF knowledge exhibits.

In a be aware to purchasers Tuesday night, mortgage analysts at Keefe, Bruyette & Woods mentioned they’ve seen a modest pickup in mergers & acquisitions exercise in latest months.

“The working surroundings for mortgage originators stays very difficult. In some circumstances, we predict that this creates a chance to amass good companies at engaging valuations whereas additionally eradicating some extra capability from the system. Because the origination market has quickly shifted to buy and profitability has fallen sharply, we predict extra lenders might look to amass mid-sized distributed retail enterprise. This could allow firms to be extra profitable within the buy market.”

The KBW analysts famous that whereas the origination companies of “some public (and confused) gamers are possible not price a lot, if something, the servicing property and in some circumstances expertise have worth. Provided that, we predict bigger M&A is feasible (possible at reductions to e-book) if acquirers obtain MSRs or proprietary expertise.”

The most definitely acquirers, per the analysts? Rithm Capital, Rocket Mortgage and Mr. Cooper.