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Lending

Housing Finance: Where are they now?

2013 filled with mergers, acquisitions, closings

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While some companies climbed the ladder of success in 2013, others lacked the same good fortune. With every growth this past year, it could be said another firm lingered out in the market somewhere, crumbling under added regulation, reduced originations or an overload of legal battles.

Over the past year, many companies redrafted their battle plans in order to conquer industry changes. Several decided to let go of specific divisions or get bought out by a larger company, while others chose to exit the business altogether.    

Looking back, one of the most recent acquisitions was Fidelity National Financial, Inc.’s (FNF) $2.9 billion acquisition of mortgage technology and services provider Lender Processing Services (LPS), which is actually still in the works.

The deal hit a few bumps during the process after the Federal Trade Commission said the deal would substantially lessen competition in some regional areas and violate U.S. antitrust laws.  

The firm’s settlement with the FTC removed one of the last major barriers preventing the proposed acquisition of LPS.            

The servicing industry continued to cope with a reduction in refinance applications and higher mortgage rates, with American Capital Mortgage Investment (MTGE) signing a definitive documentation to acquire mortgage servicer Residential Credit Solutions as an example.

As HousingWire previously noted in October, “The purchase makes sense for several reasons, American Capital is moving its portfolio away from 30-year and into more agency 15-year and adjustable-rate mortgages and will benefit from the specialty servicing expertise at RCS.”

Meanwhile, loan originations and software document management services firm Mortgage Cadence was acquired by Accenture in mid July in an effort to widen Accenture’s technology platform.

The deal came during a time when mortgage firms were concerned about compliance, new regulations and partnerships that leverage technology to deliver efficient and cost effective mortgage business processing.

Nationstar also reported a large acquisition this year and announced the strategic purchase of Greenlight Financial Services' mortgage origination business.

"The acquisition will further diversify Nationstar’s origination channels and add a low-cost, profitable source for servicing asset creation, while also providing additional capacity for HARP and recapture loans," Nationstar wrote in its earnings statement.

But the year was filled with a lot more than acquisitions, as different lenders chose to exit the business altogether.

Effective Dec. 31, SunTrust Mortgage (STI) is exiting the broker lending business, in order to realign its business with plans to serve a “smaller overall mortgage market.”

Similarly, EverBank Financial Corp. (EVER) announced it is ending its wholesale broker home lending business as the housing market recovers and the competitive and regulatory landscape of the residential mortgage industry evolve.

But not everyone is jumping ship.

In September, lender Impac Mortgage Holdings decided to shake up its offerings by announcing plans to re-enter the residential warehouse lending business through a new division, Impac Warehouse Lending.

Bill Ashmore, president of Impac Mortgage, says the firm previously had experience on the warehouse side of the business before exiting the space. Now it's back and ready to work in the changing mortgage environment.

Many of these deals are coming to a close with the end of the year, better setting up the companies for success in 2014. 

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