California-based lender American Pacific Mortgage (APM) announced an asset purchase agreement with retail lender Lend Smart Mortgage on Thursday in its latest move to drum up production across the country.
APM bought assets that include about 25 branches from the Minnesota retail lender Lend Smart. APM also acquired a database of referral partners as well as the branch leases that they had, Bill Lowman, CEO of APM, said in an interview with HousingWire.
Lend Smart will retain its name and brand and have access to APM’s mortgage products.
“Our intention is to retain all of their production and operational leadership,” Lowman said, declining to comment on whether Lend Smart will reduce its headcount. The executive also declined to comment on the terms of the deal.
Lend Smart, a company with 107 active loan originators, is licensed in 29 states and originated $378.8 million in volume last year — a steep decline from the nearly $800 million in originations in 2021.
With purchase mortgages accounting for 70% of the entire transaction volume in 2022, most of the company’s sales came from Minnesota and Arizona, mortgage data platform Modex showed.
“In addition to the model and cultural match, a lot of their production is from the Midwest. That’s one of the geographies that we are targeting for 2023,” Lowman said.
Most of APM’s business is from California, and the lender is looking to increase its presence beyond the West Coast, Lowman noted.
“We’ve only held licenses east of the [state] Mississippi for about the last four years. Most of our business historically has been west of the Mississippi, so we are targeting east of the Mississippi for our growth in 2023 and 2024,” Lowman said.
APM, which has 445 branches and 2,587 loan officers across the country, expanded last year by recruiting employees from struggling lenders or firms that shut down. Its production volume fell by more than 55% to $12.13 billion in 2022 from the previous year’s $23.6 billion.
APM most recently brought over about 150 employees from 20 AmeriFirst Financial branches after the Arizona-based lender ceased originations in December.
High-producing and profitable branches from AmeriFirst were recruited in January, which included branch managers, loan originators and processors, Lowman said in an interview last month.
The lender also hired former employees from about 35 to 40 retail branches of Finance of America Companies Inc. after it shut down its forward mortgage segment in October. In July, APM acquired Arizona-based Sunstreet Mortgage, a boutique lender that originated $293.2 million in loan volume last year.
“We retained our earnings to take advantage of market share opportunities in a downmarket,” Lowman said, noting that APM plans to continue to explore opportunities for M&As and asset purchases in 2023.