Overview of the Acquisition
In a strategic move aimed at strengthening its position in the mortgage lending industry, Florida-based non-QM lender A&D Mortgage recently announced its acquisition of the wholesale and non-mandated correspondent lending business of Mr. Cooper Group. The announcement, made on a Friday, indicates that the deal, whose financial terms have not been made public, is anticipated to be finalized by the end of March 2025. This acquisition is set to play a pivotal role in expanding A&D’s market footprint and enhancing its lending capabilities.
Financial Implications of the Acquisition
According to reports, the non-QM wholesale and correspondent lending segment that A&D is acquiring has facilitated over $10 billion in financing for business formations throughout 2024. This figure illustrates the scale and significance of the operations being taken over. It is noteworthy that employees affected by this transaction will have the opportunity to transition to A&D Mortgage post-closing, thereby reinforcing A&D’s commitment to talent retention and employee integration.
A&D’s Strategic Vision
A&D Mortgage’s CEO, Max Slyusarchuk, emphasized the meticulous approach the company has taken in identifying potential partners to bolster their QM (Qualified Mortgage) business. He expressed confidence that this transaction represents a substantial progression toward A&D’s goal of becoming an industry leader. On a broader scale, this acquisition aligns with A&D’s strategic vision to expand its reach within the mortgage industry and offer diverse lending products to a wider array of clients.
Background on Mr. Cooper Group
Mr. Cooper, which previously acquired the assets from Flagstar Bank in late 2023, has itself been a noteworthy player in the lending sector. Although they did not provide immediate commentary regarding the acquisition, they hold a significant position in the market. For the year preceding this transaction, Mr. Cooper was recognized as the 22nd largest lender in the U.S., managing to grow its origination business by over 35% year over year, reaching a total of $13.5 billion in loans.
Expansion of A&D’s Broker Network
The acquisition further expands A&D’s broker network to encompass over 8,500 partners. A&D Mortgage provides a plethora of financing options, exceeding 20 distinct programs tailored for brokers. These programs span various categories, including agency, government, jumbo, and non-QM financing. Moreover, the firm’s innovative origination system is designed specifically to streamline the funding process, enhancing efficiency and service delivery for their clients.
A&D’s Current Market Position
According to estimates from Inside Mortgage Finance (IMF), A&D Mortgage held the position of the 80th largest lender in the United States throughout the first three quarters of 2024. During this period, A&D disbursed loans amounting to $2.37 billion, marking a significant year-over-year increase of 37.5%. This growth trajectory places A&D in a favorable position as it scales its operation post-acquisition.
Conclusion
As A&D Mortgage prepares for the acquisition of Mr. Cooper’s wholesale and correspondent lending business, the move signifies a larger trend within the mortgage lending space toward consolidation and growth through strategic partnerships. A&D’s commitment to enhancing its operational capacity, along with its specific focus on high-quality partnerships, positions the company for future success. With the mortgage landscape constantly evolving, such acquisitions are pivotal in enabling companies like A&D to maintain competitiveness and serve a growing customer base.
FAQs
What is A&D Mortgage’s primary focus in lending?
A&D Mortgage primarily focuses on non-QM (Qualified Mortgage) lending solutions, offering diverse financing programs for various borrower needs.
When is the acquisition of Mr. Cooper’s business expected to be completed?
The acquisition is expected to be finalized by the end of March 2025.
What will happen to Mr. Cooper employees affected by the acquisition?
Affected employees will have the opportunity to join A&D Mortgage once the transaction closes.
How large is A&D Mortgage’s broker network after the acquisition?
The acquisition will expand A&D’s broker network to over 8,500 partners.
How does A&D Mortgage’s loan disbursement compare to the previous year?
A&D Mortgage reported a loan disbursement of $2.37 billion through the first nine months of 2024, representing a 37.5% increase year over year.
