In what’s become a trend, another lender announced this week that it is scaling back its mortgage business.
Recently, HomeStreet Bank announced plans to sell off much of its retail mortgage origination business, along with nearly all of the mortgage servicing rights associated with the loans originated in those retail outlets. Ditech Holding is also selling its forward and reverse mortgage businesses. Plus, forward and reverse lender Live Well Financial recently shut down altogether.
And that’s just in the last two months alone.
Now, FirstBank, one of Tennessee’s largest community banks, is moving away from wholesale mortgage lending and selling off its operations.
FirstBank’s parent company, FB Financial Corp., announced this week that FirstBank reached an agreement to sell its correspondent lending channel to Rushmore Loan Management Services.
Upon completion of the deal, Rushmore will assume “substantially all of the assets and personnel related to the channel,” FirstBank said in a release.
But that’s not the only lending channel that FirstBank is selling. Earlier this month, FirstBank sold its third-party origination channel to Renasant Bank.
Going forward, the bank will focus on retail and consumer-direct mortgage lending, FB Financial President and CEO Chris Holmes said.
“We are pleased to have found new homes for each of our third-party origination channels in the second quarter,” Holmes said. “These sales allow us to focus more on our customer centered retail and consumer direct channels.”
FirstBank currently has 66 full-service bank branches in Tennessee, Alabama, and Georgia, and mortgage offices across the Southeast.
The company expects to record approximately $2.6 million in restructuring expenses, transaction-related expenses, severance, and other items related to its exit from wholesale lending.
Despite the move, the company expects to see an increase in the operating results from its total mortgage operations in the second quarter of 2019 over the first quarter.
According to the bank, during the second quarter, its mortgage operations experienced “both strong origination volumes and elevated prepayments in the mortgage servicing rights portfolio.”
The bank did not disclose the financial terms of either sale. FirstBank expects the sale of its correspondent channel to close early in the third quarter of 2019.