In one more mortgage tie-up, Guild Mortgage has agreed to be acquired by Bayview Asset Administration.
It’s fairly large information within the mortgage world as a result of Guild was the eleventh largest mortgage lender in 2024, per HMDA knowledge.
And finally not that far off from being within the top-5 nationally if they’d mustered just a bit extra mortgage quantity.
As soon as mixed with their acquirer, who occurs to personal a significant mortgage servicer, they might make a fair greater splash and develop to be nearer to different elite names within the house.
The deal additionally takes Guild personal for about $20 per share, which might change how they function going ahead.
Guild Mortgage Will Mix with Lakeview Mortgage Servicing for Recapture Alternative
The story is a well-known one currently. A mortgage lender linking up with a loan servicer, much like Rocket’s acquisition of Mr. Cooper.
What’s attention-grabbing right here is Bayview Asset Administration occurs to personal the nation’s largest mortgage mortgage servicer, Lakeview Mortgage Servicing.
Barely complicated given all of the views within the names, and the bay versus lake, however stick with me right here.
This can be a related play to the Rocket/Mr. Cooper merger, with a mortgage originator (Guild) combining with a mortgage servicer (Lakeview Mortgage Servicing).
Whereas Lakeview is a significant mortgage servicer (and their web site nonetheless says “Largest mortgage mortgage servicer within the U.S.”), I consider Mr. Cooper is technically greater.
Mr. Cooper additionally says on their web site, “We’re the most important mortgage servicer within the country-with over 5 million clients.”
Regardless, it’s the identical technique, besides Guild Mortgage is a distributed retail mortgage firm and Rocket is client direct. However as soon as the loans are originated, they may all keep in-house.
Guild says it operates a “coast-to-coast distributed retail origination mannequin,” whereas Lakeview says it has 2.8 million mortgages in its servicing portfolio.
Over time, that quantity will possible develop as Guild feeds Lakeview, thereby creating extra recapture alternatives.
That in flip theoretically creates extra origination quantity, and so forth and so forth, maybe propelling Guild into the top-10 mortgage lender list and past.
This has been a key technique within the mortgage playbook currently with out mortgage origination quantity falling off a cliff.
It’s simpler to mine your personal database for prospects than it’s to exit and search for new prospects. And doubtless rather a lot cheaper too!
The query is that if it’s good for patrons, who may not look beyond their original lender, even when the rate of interest is increased, or the closing prices dearer.
Guild Mortgage Will Proceed to Function as an Unbiased Entity
After the merger, Guild Mortgage (NYSE: GHLD) will proceed to function as an unbiased entity, which is sensible given their established retail model.
However as a substitute of being a public firm, it should go personal and shareholders will obtain $20 per share.
That’s up about 25% from the prior shut and values Guild at round $1.3 billion. Additionally not a foul premium above the corporate’s 52-week low round $11.
As famous, Guild may also work “in shut partnership with Lakeview Mortgage Servicing” to create a brand new mortgage ecosystem that mixes mortgage origination and servicing.
The corporate mentioned “there shall be no materials change to Guild’s model, enterprise operations or buyer expertise because of the settlement.”
Guild’s executives and administration groups may also stay, although it’s unclear if there shall be any operational layoffs as a result of the merger.
Guild Mortgage was based all the best way again in 1960 and is licensed in 49 states and the District of Columbia (New York state the one exception).
The corporate funded $22.8 billion in residence loans final 12 months, with a near-90% share coming from residence buy lending.
They had been most lively within the states of California, Colorado, Missouri, Nevada, Oregon, Texas, Utah, and Washington.
Earlier than creating this website, I labored as an account govt for a wholesale mortgage lender in Los Angeles. My hands-on expertise within the early 2000s impressed me to start writing about mortgages 19 years in the past to assist potential (and present) residence consumers higher navigate the house mortgage course of. Observe me on X for decent takes.