It seems the rumours about ResMor shopping around its mortgage operations are true.
We’ve heard for months that various parties were vying for its mortgage business. Now it’s been confirmed that MCAP is acquiring it.
The story for consumers and brokers is that we lose another lender option.
The story for MCAP is that they pick up a great (and very profitable) servicing portfolio, as well as some in’s with ResMor’s loyal broker following.
The deal is expected to close in Q1 2012, pending regulator approval and “customary closing conditions.”
Based on funded mortgage volume, MCAP is the 5th biggest lender in the broker channel and ResMor is the 14th biggest, according to D+H’s market share report.
MCAP, the #2 mortgage servicer behind First National, is getting $6 billion of mortgages that ResMor now services. That boosts MCAP’s servicing portfolio to more than $31 billion.
In a release today, MCAP Commercial LP Chief Executive, Derek Norton said this:
“With the addition of ResMor’s professional mortgage staff, key brokers, investors and other business partners to our existing operation, we will be ideally situated to foster strong future growth.”
Steve Maker, MCAP Service Corporation Chief Executive, added that the deal will “enhance our ability to grow our share of the residential mortgage origination market through the broker channel.”
Here’s what remains to be seen:
What will happen to the ResMor Trust mortgage brand? (It will likely disappear to avoid confusion since ResMor will keep operating its automotive and deposit businesses.)
Will MCAP retain ResMor’s Alberta underwriting and servicing operations? There’s speculation that these will be moved to Toronto due to economies of scale. (We have no idea how that will affect ResMor jobs as MCAP says it’s not giving interviews this week. Speaking of jobs, ResMor has reportedly lost a number of key personnel to upstart Moncana Bank in recent months.)
Will MCAP maintain ResMor’s lending niches, like its uncommon willingness to lend in small towns? (There is concern among brokers we spoke with that MCAP will get rid of that policy.)
All told, we wish ResMor Trust employees the very best during the transition and take our hats off to MCAP for a nifty servicing acquisition.
ResMor Trust Company is a wholly owned subsidiary of Ally Financial Inc.