Blackstone mortgage venture set to become largest nonbank lender?

Finance of America spends summer becoming mortgage powerhouse

Finance of America Holdings, a Blackstone (BX) portfolio company, revealed that it snatched up several major lenders, a move likely destined to make it one of the nation’s largest nonbank originators, if all goes as planned.

Blackstone is a full-service, private-equity funded investment bank based out of New York. It recently touted the strength of the housing market and helped make the REO-to-rental market a bona fide asset class. And it's recent mortgage-lending ventures show a rapid push into the markets, allowable from the deep pockets at Blackstone.

The significant list of acquisitions now includes Gateway Funding Diversified Mortgage Services, Pinnacle Capital Mortgage and certain assets and operations of PMAC Lending Services. Finance of America Holdings also owns Urban Financial of America

And this probably won’t be the last thing that Finance of America announces. An internal email, shared privately with HousingWire, reveals that Finance of America president Steve McClellan expects to announce more "exciting plans for the future." This sentiment is no different than the publicly released message from top brass.

“We see great opportunity in the U.S. lending and resulting investment space. The people and operations associated with these businesses, the capital of our partners and strategic items yet to be announced should provide us with a significant and enduring edge in this highly competitive industry,” said Brian Libman, Executive Chairman of Finance of America Holdings, in a press statement.

Now with the acquisitions under its belt, Finance of America through its operating subsidiaries will rank among the largest nonbank originators in the United States and will be licensed in over 45 states.

It will operate in each of the retail, wholesale and correspondent channels and have its own servicing capabilities.

Additionally, it will operate approximately 300 retail lending branches, 5 wholesale and correspondent centers and employ over 3,000 professionals, of which over 1,400 are licensed loan officers.

As a result of the changes, Robert Boliard, CEO and president of Pinnacle Capital Mortgage, will become president of Western Retail and Nationwide Wholesale for Finance of America Mortgage, while Bruno Pasceri, former CEO and president of Gateway Funding, will become president of Eastern Retail and Nationwide Correspondent lending for Finance of America Mortgage.

“We seized the opportunity to become part of a nationwide mortgage lender by joining the Finance of America team. We are truly excited to be a part of the vision,” said Boliard.

“The opportunity, strength, and synergy associated with Finance of America is exciting and I am confident we will change the face of mortgage banking,” said Pasceri.  

The industry is starving for acquisitions, with potential sales like Discover Home Loans creating a pool of hungry lenders vying to purchase the vulnerable company.

Even the recent sale of Bank of America’s (BAC) appraisal management company, LandSafe, garnered a lot of attention from top lenders.

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