Movement Mortgage purchased the retail production division
of Lennar Corp.'s Eagle Home Mortgage subsidiary
in January. Onboarding the new hires was handled as if Movement embarked on a mass hiring spree. "We do not use the same loan originating system so we needed to train everyone on ours," Laura Bowles, CFO at Movement Mortgage, said in an interview. "But we onboarded this group of 230 [loan officers] like the way we'd onboard a group of new hires. We really did go out and train all of these folks on our new system, converted them over and brought them in."
The company deployed a 10-person team of human resources, IT and marketing leaders to barnstorm Eagle's four key markets of Boise, Idaho, Denver, Portland, Ore., and Seattle across a two-week period.
The team delivered in-person training to the Eagle originators on Movement's LOS, benefits package and marketing platforms. Some of Eagle's operations leaders were brought in for further multiple-day trainings on-site at sales support centers in Charlotte, N.C., and Tempe, Ariz.
Movement then created several channels for online support, an email inbox solely dedicated for any questions from incoming employees, as well as daily calls to resolve any potential problems. Additionally, there's been ongoing training and support — both live and virtual — since the deal closed on Feb. 1.
Even if both companies use the same LOS, transitioning the mortgages requires the acquirer to have enough loan officers to take the mortgages under their names while the licensing transfers. It typically takes a week to get the incoming loan officers up and running with the new company and it's an interim step taken to avoid violations. The backlog of loans gets transferred over to the purchasing company and there are licensing regulations to comply with.
"They used Ellie Mae Encompass
just like we do for an LOS," Bowles said. "Ours is built out a little more than theirs, there are more rules, so that was probably a little bit of a learning curve for them."
During the interim period, each pending loan application will need to be supervised by a mortgage loan originator licensed in that particular state. The applications then need to be transferred to a currently licensed and company-sponsored mortgage loan originator already in good standing at the acquiring mortgage lender.
"If some other practice is used to handle the loan pipeline, there are risks of penalties from state regulators related to unlicensed loan activity, i.e., a loan originator who has not yet been sponsored by the acquiring mortgage company would be engaged in unlicensed mortgage loan origination activity. Such violations could subject both the acquiring lender and the individual mortgage loan originator to penalties and enforcement," New American said in a statement.
The technology roadmap for combining companies goes well beyond the customer-facing aspects of the business. New Fed Mortgage, which in January expanded its footprint
into Pennsylvania with the acquisition of direct lender Commonwealth Mortgage sees M&A as "a way for us to build our footprint outside of New England and become more of a national type of play," Brian D'Amico, New Fed Mortgage's president, said in an interview.
D'Amico said New Fed's technology capability allowed it to "mirror" Commonwealth's compliance, templates and systems in states where New Fed didn't have a prior presence.
The expansion also forced New Fed to think about how to brand itself across its markets. It will rebrand Commonwealth to New Fed Direct in locations where it lacked a retail presence and is considering setting up DBA entities to handle originations in New Fed's preexisting markets to avoid competition between its direct and retail divisions.