Expansion-hungry Guild gobbles up Inlanta Mortgage

Mary Ann McGarry, Guild’s CEO, said the company seeks to increase its purchase portfolio and expand in the Midwest

San Diego, California-headquartered retail lender Guild Mortgage is staying true to its words of expanding through acquisitions.

The company announced on Thursday it has acquired the Wisconsin-based lender Inlanta Mortgage – which earlier that day said it would be winding down operations in 2023 – to increase its purchase loans portfolio and its market penetration in the Midwest. The financial terms of the acquisition were not disclosed. 

Mary Ann McGarry, Guild’s CEO, said that the company is patient in closing a deal and has been in conversations to acquire Inlanta Mortgage for about a year. 

What attracted Guild to the negotiation table is that Inlanta “is a great company, purchased-focused and aligned with Guild’s culture,” McGarry said during a call with HousingWire. 

McGarry said Inlanta provides a geographic expansion to Guild, a company whose strategy is to grow via acquisitions amid a shrinking mortgage market. The executive mentioned before that companies should “consolidate or exit the business.”

McGarry said more acquisitions are expected to be announced in the coming months. 

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Guild, a purchase-focused lender with a distributed retail model, reported a total in-house origination of $4.4 billion in the third quarter of 2022, compared to $5.7 billion in the previous quarter. Purchases represented 91% of the third quarter production. 

To support its acquisition strategy, Guild has an operating cash position of $162.2 million as of September 30, 2022. The lender’s unutilized loan funding capacity was $1.8 billion, according to Securities and Exchange Commission filings. 

Inlanta, founded in 1993 by John Knowlton, originated $1.74 billion in loan volume in 2021, a production that dropped to $708.68 million year to date, according to data from mortgage tech platform Modex. Purchase mortgages accounted for 65% of the total. 

“In joining Guild, we can offer our Midwest borrowers a broader array of loan options and access to new digital and customer relationship tools to improve every step in the lending experience, including servicing, a Guild strength,” said Knowlton in a statement. 

In an email to its employees on November 29, reviewed by HousingWire, Guild said the company and Inlanta are “sales-eccentric, entrepreneurial and seeking to grow.” 

The same message also mentioned that Inlanta has about 300 employees. In total, Inlanta has potential to add its current 72 active loan officers to Guild, which has 1,823 active LOs, according to Modex. 

With Guild’s acquisition of Inlanta, the Wisconsin lender will shut down next year after 11 rounds of layoffs, which are slated to end in March 2023. Inlanta was planning to hire loan originators and branch managers in the summer, but the lender’s plans took a drastic turn amid worsening economic conditions.

Lenders strong enough to withstand the headwinds will see more opportunities, but a major consolidation is expected by market experts. 

Of the lenders that produced between $125 million and $250 million in loan origination volume last year, about 72% are projected to produce $125 million in the next 12 months, Brett Ludden, managing director at Sterling Point Advisors said. 

Up to 30% of the 1,000 largest independent mortgage banks are projected to disappear by the end of 2023 via sales, mergers or failures, he added. 

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