New Fed buys Commonwealth Mortgage to expand beyond New England
New Fed Mortgage's pending acquisition of Commonwealth Mortgage LLC will allow the Danvers, Mass.-based retail lender to expand its geographic footprint outside of its New England base.
The transaction is expected to close in early 2019. Terms were not disclosed.
This is the first announced transaction for 2019, another year where mortgage industry participants see further consolidation as rates continue to rise and liquidity diminishes. December's purchase by New American Funding of Marketplace Home Mortgage was also driven by a desire to expand geography.
"The acquisition will facilitate us to grow the company further and serve other markets in more states as well as to integrate and build out their existing platform of mortgage loan servicing which will create stronger relationships with our borrowers in the future," New Fed President Brian D'Amico said in a press release.
New Fed is licensed in seven states: Massachusetts, Maine, New Hampshire, Connecticut, Rhode Island, New Jersey and Florida. Commonwealth is a direct-to-consumer lender headquartered 17 miles away in Woburn, Mass., and the deal gives New Fed the opportunity to expand its presence throughout the east coast and in particular Virginia, Illinois, Maryland and Pennsylvania, according to the press release.
"Over the past year we have built our infrastructure and have been looking for opportunities for growth," D'Amico said. "Our vision for growth has been through retail branches in New England and to open a consumer direct channel outside of New England. The acquisition of Commonwealth enables us to do that while expanding our lending footprint. We are now more versatile with our current infrastructure and more importantly we have the right people in place."
New Fed added two new branch offices during 2018, in North Andover and Winthrop. That brought its total to five according to the Nationwide Multistate Licensing System. It also brought on 25 employees during the year.