AnnieMac acquired Family First Funding

AnnieMac Home Mortgage, a Mount Laurel, N.J.-based nonbank lender, has apparently acquired another firm headquartered in the state, Family First Funding of Toms River.

Requests for confirmation from the companies had not been returned by press time. However, a check of the Nationwide Multistate Licensing System & Registry entry for American Neighborhood Mortgage Acceptance Company, the legal name of AnnieMac lists Family First as a division of the company.

Reportedly Family First was having liquidity issues, which led to the sale. Historically, restrictions on the ability to fund production, especially in a down originations market, has driven merger and acquisition activity, layoffs and mortgage company closures.

Family First is in litigation against Sprout Mortgage, a non-qualified mortgage lender that shut its doors suddenly last July. It sued Sprout last May for defaulting on a $5.1 million loan purchase. Sprout and Family First agreed to a $475,000 settlement in the case; a telephone hearing was held on Feb. 21, but no final judgment has been entered, according to court records.

The New Jersey WARN Act website has no filings from Family First for 2022 and so far into 2023.

More deals are likely among independent mortgage bankers as this segment of the industry lost an average of $2,812 per loan originated in the fourth quarter.

"Fourth-quarter results were abysmal," said Marina Walsh, the MBA's vice president of industry analytics in a press release. "Basis-point revenues dropped to levels not seen since the fourth quarter of 2011. Production costs reached their highest levels since the inception of MBA's report, and production volume has now declined for eight consecutive quarters."

This is the second acquisition for AnnieMac, formally American Neighborhood Mortgage Acceptance Co., since July, when it acquired OVM Financial of Virginia Beach, Va.; that unit was rebranded as OVM Financial Team powered by AnnieMac Home Mortgage.

The deal joins other recent transactions driven by changing industry conditions. For example, last month real estate company Keller Williams sold the assets of Keller Mortgage to Mutual of Omaha, although it retains an equity interest in the entity.

In September, Thrive Mortgage agreed to buy American Mortgage Service Co. Then in November, Movement Mortgage picked up Mortgage Network.

Other large players, like Guild Mortgage, Union Home Mortgage, American Pacific Mortgage and Go Mortgage, are taking advantage of the disruption to pick up other companies or loan officer teams.

The latter can be fraught with legal consequences. CrossCountry Mortgage is involved in litigation with rivals loanDepot and Guild over accusations of loan officer poaching.

Supposedly, one of the catalysts for the Family First move is the defection of a top producing loan officer to CrossCountry; that was also not confirmed at press time.

— Maria Volkova contributed to this story.