Guthy-Renker LLC, a marketing company known for its infomercials, will be entering the mortgage banking business through the acquisition of “a significant equity position” in Paramount Equity Mortgage, Roseville, Calif.
Terms of the deal are not being disclosed. Paramount’s current management team will remain after the transaction’s completing.
Ben Van de Bunt, the co-chief executive of Guthy-Renker, said his firm is interested in any line of business where it can acquire customers for a company that has a great product or service and Paramount meets that criteria.
Paramount already markets on radio and can take advantage of the marketing distribution channels that Guthy-Renker has access to and that helps to make them a good fit, Van de Bunt said. His company’s role is to be Paramount’s marketing partner, not only for the mortgage side, but the other businesses that company has.
“Our expertise is acquiring customers through television, the Internet, radio, print, free-standing inserts, alternative media and database marketing. What we’re able to do is take a product or service and position it in a way” to attract consumers, Van de Bunt said. It is looking to take that skill and apply it to Paramount’s businesses.
“We’ve never had the opportunity to sell a service which saves people money,” he continued. “And we think that is really appealing and think we can market it extremely well.”
He added that he has seen research that describes the mortgage industry as the biggest business in America. But right now the industry is changing and history has shown that when “big industries undergo big changes there are big opportunities.”
Van de Bunt said his firm could take what Paramount already does in the way of marketing and help them grow. Paramount lends in six states, but has plans to grow, added Hayes Barnard, founder and CEO.
The company is a correspondent originator that has been in business since 2003 and produced over $8 billion in loans from inception.
Barnard found Guthy-Renker to be a good fit with Paramount, not only in terms of culture, but also for its ability to help his firm expand.
Guthy-Renker “is just rocket fuel when it comes to building brand nationwide. They’ve done such a good job with B2C branding and advertising. And from a direct response standpoint, their operational excellence is second-to-none,” he commented.
Besides the mortgage business, there is a solar energy systems subsidiary, Paramount Energy Solutions, plus an insurance brokerage, Paramount Equity Insurance Services, which markets homeowners and automobile insurance.
It brings these three businesses together under one marketing platform, “Savings Made Simple,” Barnard said, where it tries to save consumers money on their electric bills, insurance costs and mortgages.
Another factor in the decision to team up, he said, is that Paramount wants to start utilizing television marketing, which is one of Guthy-Renker’s strengths.
Then there is the capital for growth that Guthy-Renker brings. Barnard said Paramount is looking to open an office in Denver some time around May.
It has four brick-and-mortar offices in Portland, Ore., Bellevue, Wash., San Diego and Sacramento, Calif. All of them serve as regional origination centers.