The Mortgage Bankers Association recently talked about how mergers and acquisitions are heating up, but STRATMOR, which has an active M&A practice with a focus on midsize Independent mortgage banks, looks at the market a bit differently, reports HousingWire staffer Kelsey Ramirez.
STRATMOR Senior Partner Jeff Babcock said his company is seeing higher levels of M&A activity year-to-date in 2016 than previous years, but still wouldn’t characterize it as a hot market. So why has there been an M&A uptick? Babcock said it starts with buyers who are seeking to expand their production scale in order to realize potential economies and target geographic gaps in their markets.
Meanwhile, sellers are driven by owner/operator age considerations, personal exit strategies, a highly favorable seller’s market for quality lenders with a critical mass of production, potential for a competitive bidding situation and a desire to offload some of the management functions which they perceive as distractions. Some of these include compliance, LOS optimization and warehouse line administration.