After acquiring Cherry Creek Mortgage earlier this year, Guild Mortgage, through its reverse revamped mortgage division, is moving further into the reverse mortgage business.
“Our reverse mortgage business, which we meaningfully expanded through our recent acquisition of Cherry Creek Mortgage, is now fully operational,” said David Neylan, Guild’s president and COO on the company’s second-quarter earnings call this week. “It is now being rolled out across the entire Guild platform and enables our retail team the opportunity to have a more comprehensive offering for their customers.”
Guild sees a greater opportunity to cater to customers over the entire lifecycle of a person’s housing needs, Neylan explained. The company hopes to focus on underserved and first-time homeowners, pursuing what it calls a “customer for life” strategy.
The Cherry Creek acquisition helped Guild explain its total mortgage market share in targeted geographic areas, according to Guild CEO Terry Schmidt.
“Cherry Creek is really our biggest volume increase,” Schmidt said. “And we’re in the top three or four in Colorado [due to] Cherry Creek now. We’re [also] number two in New Mexico, now.”
The company is pursuing additional acquisition opportunities, Schmidt said. She added that Guild’s ability to incorporate future acquisitions into the company should be easier because of lessons learned from the Cherry Creek deal.
“With Cherry Creek, we onboarded 500 employees in the first day they came on board,” she said. “And they’re [doing] pretty good. Within 45 days, they’re almost going full speed. So, with every one of these, we’ve gotten better at integrating them.”
As of June 30, Guild is holding roughly $36.7 million in reverse mortgage loans for investments. In the three-month span ending June 30, the company saw a $2.3 million gain on reverse mortgage loans held for investment, $7.8 million in retail reverse in-house origination and $26.6 million in wholesale reverse origination.
Guild initially acquired Cherry Creek in March, making it a more serious player in the reverse mortgage industry. Prior to the acquisition, Cherry Creek itself was only just outside the top 10 lender rankings for the industry, coming off of a 2021 reverse mortgage division expansion that included the hiring of industry veterans Bruce Barnes and Jim Cory.
“Cherry Creek has a strong reverse mortgage leadership team that has been in the industry for many years,” Schmidt said in May. “We believe having the ability to securitize and service reverse mortgages will continue to strengthen our product offerings and help us serve more customers.”
Cherry Creek is the ninth-largest reverse mortgage lender in the country, with 869 loans over the 12-month period ending on July 31, according to Home Equity Conversion Mortgage (HECM) endorsement data compiled by Reverse Market Insight (RMI). Guild and Cherry Creek are currently reported separately, with Guild registering 20 endorsements in the 2023 calendar year so far.
Across its full business, Guild reported originations of $4.5 billion and net revenue of $236.8 million in Q2, and $7.2 billion in originations and net revenue of $340.7 million in 2023 year-to-date.
“We cannot control the economic environment, however we will continue to leverage our proven business and aim to further increase market share and to accelerate growth as the markets normalize,” Schmidt said.