Philadelphia-based UMortgage struck a deal to acquire Dallas-based NXT Mortgage, the companies confirmed to HousingWire.
UMortgage is bringing NXT’s assets, technology, and people in-house, including its founder and president, Tyler Hodgson. After the transaction is complete, which is expected to happen within the next two weeks, NXT will be part of UMortgage, adopting its business model and compensation structure.
Founded in 2017 by Hodgson, NXT originated $255 million in mortgages over the last 12 months, 74% of which were purchase loans, according to the mortgage tech platform Modex. NXT has 35 active loan officers, the data shows.
“Tyler is a certified public accountant, and he did build some proprietary technology that helps with the onboarding process and makes it efficient and scalable. That was a big part of the value added to the company,” said Anthony Casa, who founded UMortgage in 2020.
According to Hodgson, NXT and UMortgage have a common vision of building a one-of-a-kind platform for loan originators.
“Our partnership will allow us to grow more rapidly towards our shared goal,” Hodgson said.
UMortgage and NXT declined to provide financial terms of the deal.
A source familiar with the transaction told HousingWire that UMortgage is paying over $10 million in cash and equity, and the payout is tied to the retention of the loan officers.
Hodgson, a Marine Corps veteran, will own UMortgage’s shares. He will also be a national sales leader, reporting to Todd Bitter, who was hired in December to replace Casa as chief sales officer at UMortgage.
UMortgage, wholly owned by UM Group Holding Company LLC, has completed a series of capital raising rounds over the last two quarters. The company sold equity to 27 senior leaders, loan originators, branch leaders, and team members, with an average contribution of $200,000 per shareholder.
However, Casa, the CEO with board of directors oversight, said he retains voting rights. Casa posted on social media in early December that he expects to own less than 1% of UMortgage by January 1, 2025. The remaining 99% of shareholders will be LOs, branch leaders, and team members.
“Our corporate documents mandate that the CEO’s contract can never be longer than one year, which means each year shareholders will vote on whether or not they want the CEO to return. No one works harder than someone on a ‘prove’ it contract,” Casa said.
UMortgage is a broker shop and a non-delegated correspondent lender that works with over 22 lenders and banks. According to Modex, it reached $617 million in production over the last 12 months, with 302 loan officers and 22 branches.
UMortgage claims it gains 65 basis points from each loan and takes 14 calendar days on average to close a loan.