CrossCountry enters into non-QM partnership with Hildene

CrossCountry Mortgage is creating a "strategic partnership" with asset manager Hildene Capital Management to provide the latter with "exclusive certain non-qualified mortgage originations."

In return, CrossCountry affiliate CrossCountry Capital will invest in an account managed by Hildene.

Specifics about this transaction were not disclosed. However, Hildene is not taking an equity position in CrossCountry, nor is it providing a warehouse line or other form of liquidity for non-QM originations.

"This strategic relationship grants Hildene an attractive entry point into the non-QM market as well as an opportunity to further strengthen the depth and breadth of our investment pipeline," said Dushyant Mehra, co-chief investment officer and portfolio manager at Hildene, in a press release. "With traditional lenders pulling back from the market, we believe CCM's origination platform is both complementary and accretive to Hildene's investment philosophy as we seek to execute on unique risk-adjusted, value-generating investment opportunities for our clients."

Hildene will gain access to "scalable, high credit quality" non-QM loans; the company did not provide more specifics regarding what kind of form of non-QM was included.

The parties will work together to securitize these originations on what was termed a programmatic basis.

"Our partnership with Hildene is a testament to the high conviction we have in the non-QM investment strategy," said Steven Ujvary, managing partner for CrossCountry Capital.

CrossCountry Mortgage is the rumored purchaser of retail non-QM originator Angel Oak Home Loans. Angel Oak's parent company announced on Nov. 10 it was exiting the channel and was selling that business, but did not disclose to whom.

Aside from the Angel Oak deal, CrossCountry has added other originators to its network over the past several years, including the Chicago-based Bemortgage business that had previously been a part of Bridgeview Bank. In 2020, it purchased the assets of First Choice Loan Services from Berkshire Hills Bancorp; First Choice had been the mortgage provider for Costco, however the warehouse store ended the program earlier this year.

CrossCountry also bought retail lender LendUS this year.

CrossCountry also looked to bulk up its loan officer staff by hiring top producers but the company has been hit with poaching law suits from Caliber Home Loans and Guild Mortgage. In turn, CrossCountry sued Guild making the same claims; that suit has been withdrawn.

Reportedly loanDepot made an offer to buy CrossCountry in 2021, but the Cleveland-based company turned it down. CrossCountry claims loanDepot filed three poaching suits in retaliation.

Like many others in the industry, CrossCountry has laid off employees. But in a strange circumstance, a Worker Retraining and Adjustment Notification act filing made on Nov. 1 in Colorado claiming CrossCountry was letting go of 100 employees was removed after the company told the state it did not make that report.

In a separate announcement from the Hildene partnership, CrossCountry Mortgage announced it created CCM Community Promise, an affordable loan program for qualified first-time home buyers currently residing in eligible census tracts in Chicago, Detroit and Philadelphia. However, the $6,500 grant for down payment and/or closing costs can be used to purchase a property anywhere in the country.

"CCM Community Promise supports our mission of making every mortgage feel like a win," said Jenn Stracensky, CrossCountry's chief operating officer. "This program makes the American dream of homeownership more accessible to those who need it most, advancing greater equity in America's housing system."