Movement to buy Lennar's retail mortgage branches
Movement Mortgage is purchasing the entire retail production division of Lennar's Eagle Home Mortgage subsidiary, although the builder will still have a housing finance business on its books.
The deal will add 35 branches and 230 loan officers in six Western states — Washington, Oregon, Idaho, Wyoming, Utah and Colorado — to Movement's network of 650 branches and 1,500 loan officers. The purchase price was not disclosed and the transaction should close later this month.
The Eagle branches will contribute $1.5 billion in annual volume to Movement, which has averaged between $12 billion and $13 billion of production over the past three years.
"We want to grow, and we relentlessly look for purpose-filled, growth-minded mortgage professionals who want to make a meaningful difference in their industry and communities," said Movement CEO Casey Crawford in a press release. "I'm excited and honored to welcome these talented individuals to Movement."
A request for comment from Lennar regarding the deal and its future in the mortgage business has not yet been returned. But the company will still originate loans for its homebuilding business customers.
Furthermore, in October, it sold a portion of its Rialto subsidiary — but not the associated mortgage finance business — to Stone Point Capital for $340 million. The homebuilder's fiscal-year earnings (ended on Nov. 30, 2018) press release issued on Jan. 9, the same day Movement announced the deal, reiterated it is retaining the Rialto mortgage finance business although it makes no mention of the Eagle sale.
The Lennar Financial Services segment had operating earnings of $187.4 million for fiscal year 2018, up from $155.5 million a year prior. It benefited from an increase in the segment's title and mortgage operations due to the acquisition of homebuilder CalAtlantic and its lending business, partially offset by a decrease in refinance transactions.
In the fourth fiscal quarter, Lennar Financial Services' operating earnings totaled $58.7 million, up from $42 million for the same period in the prior year.
On the corporate level, Lennar had net earnings of $1.7 billion for fiscal 2018, more than double the $810.5 million for fiscal 2017.
But Lennar settled a False Claims Act case that named Universal American Mortgage as well as Eagle Home as defendants, for $13.2 million in October 2018.
Movement cut 180 back office jobs in October, bringing the total to 355 for the year. But no sales positions were eliminated in the three rounds of cutbacks.