Newrez hands distributed retail reins to Synergy One

Newrez and Synergy One have struck a deal that will impact both companies' retail channels, as competition in that part of the market heats up.

The Rithm unit is refocusing on joint ventures and locally based lending in retail, while the American Pacific Mortgage affiliate takes on responsibility for that part of the NewRez channel and builds out its national presence, according to a press release the companies issued.

Financial terms of the transaction were not disclosed. 

"This move reflects our confidence in Synergy One as a partner and a continued deliberate focus on the areas of our business where we see the strongest growth opportunity," NewRez President Baron Silverstein said in the release.

NewRez is managing the transition to ensure it won't disrupt business flow or loan officers' customer relationships, according to a spokesperson, who otherwise declined to comment on specifics around how the transition would impact personnel and facilities.

"We have worked hard to build a powerful platform for retail originators, and NewRez's decision to trust us with their people reflects the strength of what we have built," Aaron Nemec, division president of Synergy One Lending, said in a press release.

Synergy One had not immediately responded to an inquiry about the onboarding process at the time of this writing. It originated nearly $2.88 billion last year while APM produced almost $8.67 billion in volume, according to iEmergent's analysis of Home Mortgage Disclosure Act data.

Newrez LLC originated nearly $21.98 billion during the same period. It ranked 17th based on the dollar amount of loan originations it produced last year. APM ranked 33rd and Synergy One placed 125th.

The three companies listed the following number of active branch locations on the Nationwide Multistate Licensing System at press time: APM, 408; Synergy One, 62; and Newrez LLC, 59. Newrez funds loans through wholesale and correspondent channels in addition to retail.

The correspondent channel, through which Newrez buys closed mortgages from other lenders, has been its main loan channel. It funded $9.7 billion in loans through this channel in the first quarter, compared with $3.2 billion via consumer direct and $2.6 billion in wholesale.

Synergy One was actively building up its retail presence prior to the American Pacific Mortgage acquisition, which closed last month. 

Before that, Synergy One acquired one of GMFS's branches in Louisiana and Montana's Mann Mortgage.

It also absorbed 11 former Draper & Kramer branches that chose not to join New American Funding when that company bought single-family assets from D&K's parent company.

Competition in the distributed retail channel could heat up now that industry giant CrossCountry Mortgage has won a bidding war for Two Harbors and its RoundPoint servicing subsidiary.

Servicing is currently considered strategically important for originators of all stripes given the current composition of the outstanding mortgage market, where interest rates stand relative to the ones those loans have, and lingering affordability concerns.

Despite challenges related to these trends that have made originators more reliant on existing loans for leads, first-time buyers still represent nearly half or 49% of the market, according to a recent Newrez report.