Recently announced mortgage-related mergers and acquisitions include a deal with alleged conflicts of interest. A new report highlights factors that will maximize value for sellers.
A report from Stratmor Group indicates that the number of motivated, well-capitalized prospective buyers of retail origination platforms exceeds the number of sellers.
“The challenge for prospective sellers is not just attracting a buyer, but aligning with the right buyer to optimize the sale execution of their company,” Stratmor’s report states.
In order to maximize value, Stratmor says sellers need sustained profitability. Also necessary is
a consistently high share of purchase financing, government originations and jumbo lending. In addition, there needs to be a model match and cultural compatibility.
Other important factors include compliant originator compensation plans, sales force quality and management effectiveness and tenure as well as production momentum, company reputation
and go-forward management roles.
Stratmor’s report also listed the top-10 worst seller characteristics, many which were related to compensation or branch structure.
Back in January,
Home Point Financial Corp. announced an agreement to acquire Indianapolis-based Stonegate Mortgage Corp. for roughly $211 million in cash.
But negotiation of the merger agreement, which is expected to closed by mid-2017, involved significant conflicts of interest, according to Andrews & Springer LLC.
In a March 16 statement, the
boutique securities class action law firm said it is investigating whether Stonegate Mortgage’s directors are breaching their fiduciary duties by failing to adequately shop the company and maximize shareholder value. It is also investigating the Stonegate’s financial advisors, Barclays and FBR Capital Markets & Co., to determine whether they conducted a fair sales process.
A deal announced last month by Flagstar Bancorp Inc. to
acquire Stearns Lending Inc.’s residential delegated correspondent lending platform has closed, a Feb. 28 statement from the bank-holding company said. No other details about the transaction terms were revealed.
Barrington Bank & Trust Company, N.A.-subsidiary Wintrust Mortgage disclosed on Feb. 15 that it acquired certain assets and assumed certain liabilities of the mortgage banking business of American Homestead Mortgage LLC in Montana. American Homestead was founded in 1993 and originated $0.055 billion in 2016.
Wintrust Mortgage, which reported nearly $5 billion in production for last year, didn’t disclose terms of the transaction. But it did indicate that a significant portion of the purchase price is conditioned upon future profitability.
Better Mortgage reported on Feb. 9 that it closed on $15 million
in Series B financing from Kleiner Perkins, Goldman Sachs, and Pine Brook. The company will use the proceeds to support the launch and expansion of Better Mortgage’s home purchase finance product on Better.com.
Better Mortgage says it has funded more than $0.5 billion in loans since launching in January 2016.
