Guild earnings show more reverse mortgage activity after Cherry Creek acquisition

Guild now lists reverse mortgages held for investment on its earnings report but offered no details about the business segment in its earnings presentation

Guild Mortgage released its fourth-quarter and full year 2023 earnings report this week, showing that it narrowed its focus on purchase originations and increased its market share on the forward lending side, but it still sustained a loss.

After its acquisition last year of Cherry Creek Mortgage, Guild increased its involvement in the reverse mortgage industry due to Cherry Creek’s well-developed reverse lending apparatus. In the new earnings report, the company now lists reverse mortgages it holds for investment, which totaled $315.9 million, representing loans it has elected not to sell on the secondary market.

Guild’s in-house retail reverse mortgage originations reached $49.8 million in volume in 2023, while its wholesale reverse origination volume was $36.8 million for the year.

The company also reported an $8.2 million gain on the reverse mortgages it is holding for investment, as well as income related to Home Equity Conversion Mortgage (HECM)-backed Securities (HMBS), according to the earnings report.

Through its Cherry Creek acquisition, Guild became a top 10 reverse mortgage lender in 2023, according to a tabulation by Reverse Market Insight (RMI). The two companies each had a high enough volume last year to effectively earn two separate slots on RMI’s leaderboard, holding the No. 8 and No. 9 positions.

Guild could move up further in 2024, considering that the sixth largest lender of 2023 — Austin-based Open Mortgageannounced its exit from the reverse mortgage business late last year due to lower origination volumes combined with lower pull-through rates, according to CEO Scott Gordon.

When combining the raw loan volume of both Cherry Creek and Guild based on RMI’s 2023 top 10 leaderboard, the company produced 1,136 HECM endorsements in 2023. If that figure was credited solely to Guild, then the company would have emerged as the sixth largest lender in the industry, just behind Fairway Independent Mortgage Corp.

Guild also ended 2023 as the sixth largest HMBS issuer in the industry, according to a report from New View Advisors based on public Ginnie Mae data and proprietary private sources.

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