After going public last fall, Guild Mortgage is expanding its footprint into the Northeast with an agreement to acquire South Portland, Maine-based Residential Mortgage Services Holdings Inc. (RMS) for roughly $197 million.
If the deal closes as expected during the third quarter, RMS will be San Diego-based Guild’s seventh acquisition since 2008. Guild will grow by 70 retail branches and 250 loan officers, making it one of the 10 biggest non-bank retail lenders in the country.
Guild CEO Mary Ann McGarry touted the strategic nature of the acquisition, noting that both companies are retail lenders that focus on purchase loans. Over the last decade, 70 percent of RMS’ business has been purchase loans.
Mary Ann McGarry
“Our close cultural alignment and commitment to strong values across both organizations, combined with a retail and purchase market focus provide us with confidence that this acquisition will contribute to our ongoing success,” McGarry said in a statement. “With both teams dedicated to providing exceptional customer service, and the many synergies between our products, sales tools, and servicing teams, this is a natural fit.”
The RMS management team is staying on board, the companies said, with Guild’s in-house technology and servicing expertise helping position the company to “capture additional repeat business and build clients for life.”
Guild currently has a presence in only three states where RMS does business: Ohio, North Carolina and South Carolina. The deal will give the company retail branches in nine new states: Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, Pennsylvania, Rhode Island and Vermont. RMS provides services in New Jersey and West Virginia from branches in adjoining states.
Guild Mortgage’s retail presence after RMS acquisition. | Source: Guild Mortgage investor presentation.
A little more than a decade ago, Guild had only 75 branches in 16 states. The company added 17 offices in Missouri, Illinois and Kansas in 2018 by acquiring St. Louis-based Cornerstone Mortgage, and opened its first branches in Ohio in March. Today it has retail branches in all but seven states: Indiana, Kentucky, Michigan, Minnesota, Mississippi, New York and South Dakota.
In is most recent annual report to investors, Guild said the company’s success in the retail market is tied to the expertise of its loan officers and the strength of its referral partner network, which depends on relationships with Realtors, builders, and financial planners.
The company’s internally developed technology includes “Guild to Go,” a partner portal application “that enables seamless interaction between Guild’s sales teams and our large referral partner network by providing an easy referral process, on-demand pre-approval letters and real-time milestone tracking.”
In addition to adding branch offices and loan officers in new markets, Guild is also intent on “recapturing” existing customers, by refinancing a current loan or helping originate a current client’s new home purchase.
In its IPO prospectus last year, Guild boasted that it had boosted its overall recapture rate from 37 percent in 2017 to 61 percent in 2020. During the first three months of 2021, Guild reported recapturing 69 percent of clients who refinanced.
