July 31, 2021

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Mortgage News

Coppell mortgage lender Caliber Home Loans sells for $1.675 billion in consolidation play

Caliber Home Loans, the Coppell-based mortgage giant, is being sold for $ 1.675 billion as part of a consolidation game. This creates the fifth largest lender in the country, serving the still hot real estate market.

Caliber’s owner, Lone Star Funds, based in Dallas, announced the cash agreement with New Residential Investment Corp. on Wednesday. , a financial services company headquartered in New York that operates mortgage lender and services company NewRez.

The transaction is expected to close in the third quarter.

“We believe this is a great acquisition for our company,” said Michael Niernberg, chairman and CEO of New Residential, in a statement. “The combination of the NewRez and Caliber platforms creates a leading financial services company with scalability, talent, technology and products.”

Kidneyberg later said on a conference call to discuss the business, “This will really help us get back to where we were before COVID, grow our profits, increase our book value, and I think we will become a high shareholder over time Will create value. ”

Bloomberg Intelligence analyst Ben Elliott described the takeover as a “bargain” for New Residential.

“The combined companies would serve $ 576 billion in unpaid capital and earn $ 142 billion annually, collectively the fifth largest lender nationally, and strengthen NewRez’s margins through significant improvements in mix, recapture rates and technology “wrote Elliott.

Caliber reported pre-tax profit of $ 891 million last year, slightly less than New Residential’s pre-tax profit of $ 934 million.

According to Housing wire, Caliber was ranked the sixth largest home loan and refinancing originator in the country in 2020.

Kidneyberg told analysts that he expects the companies to function separately during the initial integration before merging their operations in the future. Executives weren’t sure who would run the combined company.

Caliber, led by CEO Sanjiv Das, first filed for an IPO last fall, but later withdrew its IPO, citing uncertain market conditions caused by a surge in COVID-19 infections and the controversial US presidential election. The company employs almost 6,000 people.