HomeBridge Financial Services, a national independent mortgage lender, announced it will purchase the operating assets of Prospect Mortgage from Prospect Holding Company.
HomeBridge said in a release that it signed a definitive agreement to primarily purchase Prospect Holding Company’s loan production platform.
Through the deal, HomeBridge said it “will become one of the largest nonbank mortgage lenders in the country” and have approximately 900 retail mortgage loan originators in nearly 250 branches.
The announcement stated that HomeBridge will continue to operate its two wholesale divisions, employing more than 3,000 full time associates across the enterprise.
Under the agreement, Michael Williams, Prospect's chairman and CEO — who is also the former president and CEO of Fannie Mae — will remain with HomeBridge in an advisory role for the immediate future.
"This arrangement creates a true loan production powerhouse that should become the nation's premier nonbank mortgage company. I expect a smooth transition because of the similarities in corporate cultures at HomeBridge and Prospect,” said Williams.
On the HomeBridge side, CEO Peter Norden, President Joel Katz and Chief Operating Officer Joe Sheridan will continue to lead the business.
"In today's mortgage market, size, capital, liquidity and product diversity are critically important to long-term growth and success," said Norden. "Specifically, our access to capital will improve, impacting our funding capabilities and our ability to increase our presence in existing and new markets.
“We will remain an entrepreneurial, flexible and nimble mortgage banker by effectively balancing profitability and volume, while continuing our commitment to operating in compliance with the current mortgage lending regulatory landscape," he stated.
The announcement also noted that Doug Long, Prospect's president of national lending, will take an executive vice president role with HomeBridge and manage existing Prospect branch operations that are moving to HomeBridge.
The asset purchase is expected to close in January 2017.
This news falls in line with recent predictions from the Mortgage Bankers Association. The MBA recently stated that acquisitions are on the rise for lenders as they struggle to manage the increase in costs to originate a loan, according to MBA Chief Economist Mike Fratantoni.