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M&A

Year in review: Mortgage industry mergers and acquisitions in 2021

By Brad Finkelstein
December 26, 2021 9:06 PM

Year Two of the pandemic was an exceptional year for merger and acquisition and investment activity among mortgage and related companies.

Below are some notable transactions during 2021, including a handful that turned out differently than some parties originally intended.

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Selective focus.Word M and A (mergers and acquisitions) with jigsaw puzzle on red background.Business concept.

Jan. 6: Guaranteed Rate buys Stearns from Blackstone

Guaranteed Rate purchased Stearns Holdings from Blackstone Group; in a move that helped the Chicago-based company expand its joint venture business. The transaction also moved Guaranteed Rate into the broker/wholesale business.

No details on the deal were disclosed except that Blackstone received an equity stake in the Guaranteed Rate.

(Read full story here.)

Jan. 7: SoFi agrees to SPAC merger

Social Finance agreed to merge with special purpose acquisition company Social Capital Hedosophia Holdings Corp. V, a deal that valued the online lender at $8.7 billion.

"We want to invest heavily in acquisitions and new growth vehicles," CEO Anthony Noto said at the time.

(Read full story here.)

Jan. 14: UniversalCIS acquires SharperLending

Credit report provider Universal CIS moved into the appraisal technology side of mortgage origination with its acquisition of SharperLending.

SharperLending's primary offering was Appraisal Firewall, but it also marketed credit reporting system XpertOnline, and the EPN loan origination and settlement service technology.

The deal was the third acquisition by UniversalCIS since August 2020; as CIS Credit Solutions it merged with credit report provider, Advantus and then acquired Universal Credit Solutions. But the company was not finished making transactions.

(Read full story here.)

Jan. 22: UWM completes SPAC merger

United Wholesale Mortgage went public after it completed its transactions with Gores Holdings IV. It was one of the early deals in what became a SPAC craze.

In connection with the closing of the merger, UWM received approximately $925 million of gross proceeds. That broke down into approximately $425 million in cash from Gores Holdings IV, as well as $500 million in proceeds from the previously announced private placement offering.

UWM CEO Mat Ishbia would later attempt to monetize some of his 94% stake, but a negative reaction from stock market investors put the kibosh on that.

(Read full story here.)

Feb. 3: PacWest buys specialty lender Civic

PacWest Bancorp in Los Angeles acquired a business that makes loans to residential real estate investors, Civic Financial Services. The company did not disclose the price it paid.

Civic, formed in 2014, has funded more than $4.4 billion of loans to real estate investors, including $1 billion in 2020.

(Read full story here.)

Feb. 3: Calculated Risk buys Castle

Calculated Risk Analytics completed its acquisition of Castle Holdings and its subsidiary, Castle Mortgage.

The conventional and non-QM lender rebranded Castle with the name it does business under, Excelerate Capital, in order to expand its footprint.

Excelerate is based in Newport Beach, Calif., with branches in Hawaii and Arizona. Licensed in eight states, it funds loans through both retail and wholesale channels. Castle is headquartered in San Diego and has branches in Arizona and Nevada. It is licensed in Washington, D.C. and all but four states: Alaska, Massachusetts, Montana and New York.

(Read full story here.)

Feb. 4: CoreLogic saga ends — for the time being

CoreLogic agreed to be bought by private equity firms Stone Point Capital and Insight Partners to buy the company for $80 per share or $6 billion.

That seemingly put an end to the chase that started the previous June with a hostile takeover bid of $65 per share from Senator Investments and Cannae Holdings.

But losing bidder CoStar Group, which offered a competing bid of $6.7 billion, would not go away quietly.

(Read full story here.)

Feb. 16: AmeriHome, Aris Mortgage Holding acquired by Western Alliance

Western Alliance Bancorp agreed to pay $1 billion for Aris Mortgage Holding, the parent company of AmeriHome Mortgage.

AmeriHome filed the paperwork to go public on Oct. 1, with pricing expected to take place on Oct. 28, but it delayed its IPO due to market volatility.

AmeriHome's correspondent lending model "diversifies Western Alliance’s current commercially focused spread-based income to deliver a more-balanced business mix," Ken Vecchione, the bank's president and CEO, said. "This creates a meaningful increase in non interest income."

(Read full stories here and here.)

Feb. 18: Propertybase buys mortgage fintech Unify

With its acquisition of Cross Media, owner of customer relationship management tool Unify, real estate software provider Propertybase joined a host of companies completing mergers and acquisitions with the goal of becoming an all-encompassing one-stop shop for housing-related needs.

While Unify was used by approximately 80 companies, Propertybase's lead generation, CRM, compliance management and other software tools are used by 4,500 real estate entities.

(Read full story here.)

March 1: CoStar increases bid for CoreLogic

CoStar Group, whose previous $6.7 billion bid for CoreLogic was all stock, tried to sweeten the pot by making a portion of its offer in cash.

But three days later, CoreLogic responded, stating it would only consider the offer, now valued at $7.25 billion, if CoStar increased the share of cash it was willing to pay.

On March 4, it all came to an end as CoStar decided to withdraw its offer, no doubt influenced by investors hammering its stock price over the previous two weeks.

(Read full stories here, here and here.)

March 3: Doma to join ranks of publicly-traded title companies

Doma, previously known as States Title, agreed to merge with Capitol Investment Corp. V, in a deal valued at $3 billion. This transaction will generate $645 million in proceeds, including $300 million from private investment in public equity.

The proceeds from the deal were to be used to expand into adjacent businesses like appraisal and home warranty, as well as possibly purchase other title agencies.

(Read full story here and here.)

March 15: Blend buys Mr. Cooper's Title365

Mr. Cooper started shedding parts of its Xome business, with the first domino being the sale of Title365 to Blend in a deal valued at $500 million.

"We determined that Title365 would gain greater investor credit as part of a company like Blend, where it will have a significant strategic impact," said Jay Bray, chairman and CEO of Mr. Cooper Group, in a press release.

(Read full story here.)

March 17: UniversalCIS gets new majority investor

Investment banker Lovell Minnick acquired the majority stake in UniversalCIS; terms of the deal were not disclosed.

"I was able to piece together some of the best operating smaller businesses in the industry to create a top five player in credit," said UniversalCIS Chairman Perry Steiner. "In doing so, I did not have any outside investors. We believe there's an opportunity to continue to consolidate our market and also most importantly, add technology solutions to the market."

(Read full story here.)

March 17: Black Knight buys broker-facing loan origination system

Black Knight staked its space in the mortgage wholesale channel with its purchase of a loan origination system for mortgage brokers from NexSpring Financial, a mortgage brokerage co-founded by now-Radian CEO Rick Thornberry.

The acquired LOS will be rebranded in the near future, the company said. It will be a standalone platform, although there will be integrations for wholesale mortgage lenders that use Black Knight's existing product Empower LOS. Terms of the deal were not disclosed.

(Read full story here.)

April 6: Genworth ends merger with China Oceanwide, starts Enact IPO process

After over four-plus years of stops and starts, Genworth Financial terminated its acquisition agreement with China Oceanwide.

Instead, it went to Plan B, which included an initial public offering for a minority stake in its U.S. mortgage insurance subsidiary, which was to be renamed Enact Holdings.

The Enact IPO was delayed on May 13, but eventually was completed in September.

(Read full story here.)

April 14: New Residential's Caliber purchase scuttles two IPOs

Real estate investment trust New Residential agreed to buy Caliber Home Loans for $1.67 billion. The deal took two potential IPOs off the table.

Caliber was on the verge of pricing its stock but had to put it on hold around the same time and for the same reasons AmeriHome did.

This transaction also killed the IPO for NewRez, New Residential's origination and servicing business. The REIT went as far as filing a confidential registration statement during 2020. But after the Caliber announcement, New Residential Chairman, CEO and President Michael Nierenberg, said there was now "no rush" to take NewRez public.

(Read full story here.)

April 26: New York Community agrees to buy Flagstar

New York Community Bank, primarily a multifamily lender that previously dabbled in residential, agreed to buy Flagstar Bank, a major single-family and warehouse loan originator, in a $2.6 billion deal.

The mortgage warehouse loans, as well as the residential loans on Flagstar's balance sheet, would reduce NYCB's concentration in multifamily to 56% of the combination's lending portfolio.

(Read full story here.)

April 28: Finance of America buys Parkside Lending's wholesale business

Finance of America, which completed its merger with Replay Acquisition to go public on April 5, then went out and purchased San Francisco-based Parkside Lending's wholesale business.

FOA agreed to pay approximately $40 million, but did not disclose the composition of the compensation, including whether it would include any stock.

Overall, this is the 17th acquisition for the Irving, Texas-headquartered company since it was formed in 2013. In March, FOA purchased Renovate America's Benji financing product, which will be deployed in a new vertical, Finance of America Home Improvement.

(Read full story here.)

April 28: Texas bank takes 49% stake in mortgage banker

Veritex Holdings in Dallas has agreed to buy a large stake in Thrive Mortgage of Georgetown, Texas.

The $9.2 billion-asset Veritex said in a press release that it will pay $53.9 million in cash for a 49% stake in Thrive. The deal is expected to close in the middle of 2021.

Thrive operates in several states, including Texas, Ohio, Colorado, Kentucky, North Carolina, Kansas, Virginia, Florida, Maryland and Indiana.

(Read full story here.)

May 11: Better.com agrees to $7B deal to go public

Better.com, which raised $500 million from Softbank in April, agreed with SPAC Aurora Acquisition in a deal valued at $6.9 billion (with a post-merger valuation of $7.7 billion).

Softbank agreed to put another $1.5 billion into Better.com once the deal closed, which at the time the parties said should happen in the fourth quarter.

"This transaction provides investment capital to accelerate Better's growth and support our mission to make homeownership simpler, faster, more affordable and more accessible for all Americans, and eventually everyone else," Better founder and CEO Vishal Garg said at that time.

(Read full story here.)

May 11: Guild makes first post-IPO acquisition

Guild Holdings announced a deal to acquire Residential Mortgage Services, a move designed to expand the mortgage lender’s national retail presence.

With Guild's purchase activity up, the timing appeared right for the $196.7 million acquisition of the Portland, Maine-based lender, which shares a similar profile to Guild in that it is weighted toward purchases in the retail channel.

"In essence, we are doubling down on the purchase market with the retail channel, which we believe will drive more consistent earnings and more attractive gain-on-sale margins across interest-rate cycles," said Terry Schmidt, president of Guild Holdings, in the company’s earnings call. RMS is Guild’s seventh acquisition since 2008.

(Read full story here.)

May 25: Stewart buys Cloudvirga

Following the September 2019 rejection by the Federal Trade Commission and New York insurance regulators of the purchase of Stewart Information Systems by larger rival Fidelity National Financial, the Houston-based company went on its own buying spree.

The 13th of those deals involved the acquisition of Cloudvirga; the terms of the transaction were not disclosed.

In 2018, Cloudvirga rolled out a product that allowed loan officers to submit applications to both Fannie Mae's Desktop Underwriter and Freddie Mac's Loan Product Advisor at the same time with a single click.

(Read full story here.)

May 28: Black Knight buys marketing firm Top of Mind Networks

Black Knight signed a deal to buy marketing automation provider Top of Mind Networks for $250 million in cash. It was the company's sixth acquisition since the start of 2020.

(Read full story here.)

June 14: Cornerstone Home Lending buys Texas depository

Cornerstone Home Lending bought the $212.6 million-asset Roscoe State Bank in Roscoe, Texas.

Owning a bank was intended to allow the mortgage lender “to significantly expand product and service offerings to our hundreds of thousands of customers and referral sources throughout the country,” Marc Laird, founder, chairman and CEO of Cornerstone, said in a press release.

(Read full story here.)

June 30: CoreLogic purchases ClosingCorp

Following the resolution of its own ownership issues, CoreLogic agreed to buy ClosingCorp.

ClosingCorp CEO Bob Jennings lauded the complementary focuses of two companies. "Pairing our fees and order management platform with the greater resources that CoreLogic brings will create significant benefits for our customers in terms of simplified workflow and continuous innovation," he said.

(Read full story here.)

July 7: PE firm acquires quality control company LoanLogics

Private equity firm Sun Capital Partners acquired LoanLogics, a digital mortgage audit software provider, as one of its initial investments in its technology vertical.

Terms of the deal were not disclosed. LoanLogics, headquartered in Jacksonville, Fla., had a post-money valuation of between $50 million and $100 million following a 2016 investment according to Crunchbase.

"The support and resources Sun Capital is capable of providing to companies like ours will enable us to continue to ensure quality performance for our clients, enhance our operations and serve the rapidly modernizing mortgage technology market," LoanLogics CEO Bill Neville said in a press release.

(Read full story here.)

July 12: Better.com adds U.K.-based mortgage broker

Better.com agreed to acquire a mortgage broker based in London, Trussle Lab. Terms of the deal were not disclosed.

"We researched the U.K. market and were surprised to see how we could make it so much better for consumers buying and financing a home for the first time," Vishal Garg, Better's CEO, said in a press release. "We found a kindred spirit in the team at Trussle who have developed a platform that we can work alongside to help every Briton own their own home."

(Read full story here.)

July 16: Fortress exits U.K. mortgage business with sale of former GMAC-RFC unit

Fortress Investment Group announced it would sell Foundation Home Loans to Athene Holding Ltd.

Neither company disclosed the terms for the sale of Foundation Home Loans, the trading brand of Paratus AMC Ltd. FHL is a successor to GMAC-RFC, which was a top 10 company in both the U.K. and the U.S. pre-crisis. Apollo Global Management was expected to oversee Athene’s investment in FHL the transaction following regulatory approvals.

(Read full story here.)

Aug. 3: Figure merges with Homebridge

Mortgage banker Homebridge Financial Services merged with Figure Technologies. The transaction came just days after the fintech firm closed on a $200 million Series D financing round. Investors in the round included Apollo Global Management, Blockchain.com, Rockaway Blockchain, HOF Capital, Endeavour Capital, National Bank Holdings, Goldentree Asset Management and L1 Digital.

Terms of the Homebridge deal were not disclosed.

"We are bringing together the most robust, powerful and efficient technology ever seen in lending and pairing that with a $25-billion-a-year loan originator with 150,000 customers we can introduce to new payment and lending products," said Figure founder Mike Cagney. "We're going to deliver to this all-star loan origination team at Homebridge a tech platform on Provenance Blockchain that is going to double their capacity for fulfilling loans."

Then on Aug. 11, Figure entered into a partnership with mortgage servicer Sagent, and Aug. 16, it received an equity investment from New York Community Bank.

(Read full story here and here.)

Aug. 23: Mr. Cooper sheds more Xome units

Following the completion of the Title365 sale to Blend, Mr. Cooper sold Xome Valuations to Voxtur Analytics, a Toronto-based company with operations on both sides of the border, for a total of $15 million.

Then on Sept. 20, Mr. Cooper divested Xome Field Services to Cyprexx Services for an undisclosed price.

That left Xome with a property auction business. "Along with the sale of the title and valuations businesses earlier this year, this transaction, which is expected to close during the fourth quarter, further reinforces Xome's commitment to maximizing the potential of its auction platform and becoming the premier asset management company in the industry," a statement from the company said.

(Read full story here and here.)

Aug. 31: Arch acquires Australian MI underwriter

Arch Capital Group, whose business lines include U.S. and Australian private mortgage insurers plus global mortgage reinsurance, bought Westpac Lenders Mortgage Insurance Ltd.

Arch aimed to combine the operations of WLMI with those of Arch LMI. Per terms of the acquisition, which was initially announced in March, the newly merged company became WLMI's former parent Westpac's exclusive provider of lender mortgage insurance on new originations for 10 years.

(Read full story here.)

Sept. 1: A Virginia community bank invests in mortgage lender

FVC Bancorp took a 29% stake in Atlantic Coast Mortgage; terms of the deal were not disclosed.

FVC already provides Atlantic Coast with a mortgage warehouse lending facility. A closer relationship will help the bank — which focuses largely on commercial real estate lending — broaden its mortgage product set, Chairman and CEO David Pijor said Tuesday in a press release.

FVC did this transaction as it was working on closing a merger of equals with Blue Ridge Bankshares.

(Read full story here.)

Sept. 14: Covius acquires Nationwide Title Clearing

Covius Holdings acquired Nationwide Title Clearing to expand its post-closing offerings, much in the same way its 2020 purchase of Clayton Services did for due diligence.

"One of our primary goals is to create a counterbalanced, diversified earnings business model," said Rob Clements, Covius' chairman and CEO. "Over time we've been able to really diversify with products and services that are targeted towards the origination business, servicing-related businesses and with the Clayton acquisition, now we have strong capital markets capabilities."

(Read full story here.)

Oct. 4: Regions buys California commercial real estate lender

Regions Financial acquired the lending and servicing business of Sabal Capital Partners. Financial terms of the transaction were not disclosed.

Sabal is a top originator of small-balance commercial real estate loans backed by Fannie Mae and Freddie Mac, and has also been growing its non-agency commercial mortgage-backed securities loan originations, Regions said in its announcement. The company has originated $6 billion in loans since it was founded in 2009 and currently maintains a servicing portfolio of $5 billion.

(Read full story here.)

Oct. 5: UniversalCIS merges with Credit Plus

UniversalCIS did yet another deal, merging with Credit Plus to create the mortgage industry's largest provider of tri-merge credit reports.

Credit Plus, founded in 1997, grew organically to be the third largest company in its business, but could not crack the top two.

"Our goal was always to become the biggest and best in the industry," said Credit Plus CEO Greg Holmes. "We're aligned in how we run our businesses, and we found a good partner, in the fact that we were all independently small at one point, and then we all grew our businesses very aggressively and outsold the competition."

(Read full story here.)

Oct. 7: Realogy sells majority share of title underwriter

Real estate franchisor Realogy is selling a 70% stake in its title insurance underwriting subsidiary, Title Resources Guaranty, to Centerbridge Partners for $210 million in cash.

The two parties are creating a joint venture, Closing Parent Holdco, which will own Title Resources Guaranty. This transaction is expected to close in the first quarter of 2022.

The deal does not include any ownership stake in Realogy's title agency, escrow and settlement services business.

(Read full story here.)

Oct. 18: SimpleNexus buys LBA Ware

SimpleNexus bought incentive compensation management technology provider LBA Ware in its first-ever acquisition. Financial terms of the deal were not disclosed.

LBA Ware founder and CEO Lori Brewer will join SimpleNexus as executive vice president and general manager. In 2019, LBA Ware added business intelligence to its product offerings with the introduction of LimeGear.

(Read full story here.)

Oct. 20: StoicLane's first investment is an AMC

StoicLane made its first acquisition in the mortgage services business, purchasing the majority interest in appraisal management company Lender's Valuation Services.

Terms of the transaction were not disclosed. This deal followed StoicLane's participation in a $175 million capital raise by lender Interfirst Mortgage.

"We're thrilled to work closely with LVS' exceptional leadership team, including Tiffany Wojcik and Matt Wojcik, as we support their objective to grow into one of the largest appraisal management companies in the U.S.," Al Goldstein, co-founder, CEO and chairman of StoicLane, said in a press release. "We see a significant growth opportunity and look forward to working with LVS as they continue to innovate within the appraisal industry."

(Read full story here.)

Nov. 2: Fix-and-flip lender Anchor Loans acquired by Pretium

Investment management company Pretium bought fix-and-flip lender Anchor Loans from affiliates of Wafra Capital Partners and the other unnamed owners. Terms of the transaction were not disclosed.

The parties saw an opportunity to cross-sell products to each other's clients.

"Pretium was formed with the goal to solve the shortage of housing in the U.S. and, today, is contributing to our local communities by creating attractive rental homes, offering capital solutions to homebuyers, and now providing loans for residential real-estate investors and entrepreneurs," said Don Mullen, Pretium CEO said in a press release.

(Read full storyhere.)

Nov. 16: SimpleNexus acquired by fintech nCino

Fintech nCino is acquiring SimpleNexus in a deal valued at $1.2 billion, expanding its footprint into the independent mortgage banker lending segment.

The financial consideration consists of 13.2 million shares of nCino stock and $240 million in cash.

SimpleNexus, which offers a communications app that links the various players in the mortgage process — borrower, real estate agent, loan officer and settlement agent — across multiple systems, has raised a total of $128 million.

(Read full story here.)

Dec. 1: Better.com restructures deal to put cash on its balance sheet

Better.com rearranged the terms of its merger agreement with Aurora Acquisition to put $750 million on its balance sheet right away, and another $750 million after it went public.

Ostensibly, the money was to help Better grow, but just a day later, the New York-based company fired 900 workers via a now-infamous Zoom call.

Pundits debated whether the uproar helped or hurt the Better brand — and the future of the merger — and it resulted in company founder Vishal Garg temporarily step aside from the day-to-day running of the company.

(Read full story here.)

Dec. 2: LoanLogics buys fintech specializing in self-employed market

Mortgage audit firm LoanLogics has purchased LoanBeam, a company approved by major government-related investors to help process and calculate self-employment income used in underwriting.

"Since our acquisition in July, we've been actively looking for companies that are out there that would be a fit. We looked at a few and didn’t find anything that fit our criteria [until] we became aware of LoanBeam," LoanLogics CEO Bill Neville said. "We do similar work, not around income [like LoanBeam does], but we take loan files, target specific fields in there, and then we run rules against them, so there's a synergy there that makes sense."

(Read full story here.)

Dec. 7: Company headed by former Freddie CEO buys CRE lender

NewPoint Real Estate Capital, an apartment building lender headed by David Brickman, former chief executive officer of Freddie Mac, acquired Housing & Healthcare Finance LLC, a commercial real estate finance company.

HHC Finance, based in Bethesda, Maryland, focuses on helping to finance nursing homes, apartment buildings catering to seniors, and other facilities. It is combining with NewPoint, which mainly finances apartment buildings with loans guaranteed by the Federal Housing Administration, Brickman told Bloomberg.

(Read full story here.)
Brad Finkelstein
Originations Editor, National Mortgage News
M&A Mortgages Industry News
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