Growing real estate player Pretium buying Deephaven Mortgage from Värde Partners

Set to acquire non-QM lender

Pretium, an investment management firm that focuses on residential real estate, mortgage finance, and corporate credit, already owns one of the nation’s largest single-family rental operators and buys non-performing loans from the GSEs by the truckload, and now, the company is set to expand its presence in the mortgage business even more.

Pretium announced Tuesday that it is set to acquire Deephaven Mortgage, a mortgage company that specializes in non-Qualified Mortgages, from Värde Partners.

Värde Partners acquired Deephaven back in 2014, and helped the company grow its non-QM lending business significantly over the last few years. According to the companies, over the last five years, Deephaven has invested in more than $4 billion in non-QM loans to become “one of the leading issuers” of non-QM securitizations.

But now, Värde is selling Deephaven to Pretium, which is becoming a large player in residential real estate. Pretium bills itself as the “largest private single-family rental owner and operator in the U.S.” and has more than 32,000 single-family rental homes in its portfolio.

Pretium owns and and operates Progress Residential, which manages its portfolio of single-family rentals.

Pretium has also acquired more than 31,000 mortgages with a collective unpaid principal balance of $5.7 billion, and separately owns over 1,700 rental homes.

And soon, its portfolio of companies will include Deephaven as well.

“We are excited to be acquiring one of the most established leaders in the Non-QM market and we expect the business to benefit from working closely with Pretium’s existing single-family rental and mortgage credit businesses,” Donald Mullen, founder and CEO of Pretium, said in a statement. “Deephaven is a synergistic, natural extension of Pretium’s existing strategies in single-family rentals and mortgage credit, within our residential credit ecosystem.”

As for Deephaven, Founder and CEO Matt Nichols said that joining Pretium will allow the company continue growing.

“Deephaven was founded to serve the millions of credit worthy borrowers, who would otherwise have been excluded from the mortgage market. We are grateful for Värde’s partnership in helping us build and establish a leadership position in the non-QM market,” Nichols said.

“We are excited to join Pretium, continuing a tradition of partnering with organizations that share our vision for the mortgage market and commitment to responsible lending,” Nichols added. “We look forward to our partnership and the opportunity it will afford us to continue our leadership position in the high-growth non-QM market.”

Brian Schmidt, partner and head of mortgages and North America real estate at Värde, said the company is “pleased” that Pretium is buying Deephaven, adding that Pretium “distinguished itself as the optimal partner to support Deephaven’s continued growth and success.”

The companies expect the deal to close in the second half of 2019. Financial terms of the deal were not disclosed.

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