Home Topics Real Estate The greatest thrift in the nation acquires the top 20 mortgage lenders

The greatest thrift in the nation acquires the top 20 mortgage lenders

Flagstar Bancorp Inc., a top 20 mortgage lender doing business nationwide, is merging with the country’s biggest thrift, New York Community Bancorp Inc., in a $ 2.6 billion deal that brings the combined company nearly Brings 400 stores in nine states.

Flagstar Bancorp Inc., a top 20 mortgage lender doing business nationwide, is merging with the country’s biggest thrift, New York Community Bancorp Inc., in a $ 2.6 billion deal that brings the combined company nearly Brings 400 stores in nine states.

Thomas R. Cangemi

New York Community President and CEO Thomas R. Cangemi will lead the combined company, which will be headquartered in Long Island, New York. Cangemi called Flagstar “a like-minded partner” who offers “a diversified source of income, an improved funding mix and the use of our scale and technology in moving from a traditional thrift model”.

The merger will “enable each of us to continue our transformation into a full-service commercial bank by expanding our product offerings while expanding our geographic reach without overlapping branches,” Cangemi said in a statement.

New York Community Bank operates 237 branches in New York, New Jersey, Ohio, Florida and Arizona through eight local divisions, including Queens County Savings Bank in New York. Garden State Community Bank in New Jersey; Ohio Savings Bank in Ohio; and AmTrust Bank in Florida and Arizona.

Flagstar is based in Troy, Michigan with 158 offices in Michigan, Indiana, California, Wisconsin, and Ohio. The combined company will continue to use the Flagstar Bank brand in the Midwest.

Lee M. Smith

Flagstar offers home loans through a wholesale network of brokers and correspondents in all 50 states and 87 retail locations of Flagstar and Opes Advisors in 28 states. Flagstar’s Lee M. Smith will continue to lead the combined company’s mortgage operations as senior executive vice president and president of mortgage.

The merger could provide an opportunity to provide mortgage loans to New York community customers currently referred to Freedom Mortgage Corporation.

The New York community built an in-house residential mortgage business by taking over a failed thrift, AmTrust Bank, in 2009. But it sold that business – including $ 500 million in mortgage assets and more than $ 20 billion in mortgage servicing rights – to Freedom Mortgage in 2017.

It’s not clear whether the New York community will continue to refer customers to Freedom Mortgage, or whether the merger with Flagstar will allow them to re-deliver these services in-house. A Flagstar spokeswoman referred questions to the New York community. Neither the New York Community nor Freedom Mortgage commented at the time of going to press.

According to an iEmergent analysis of the data submitted to federal regulators, Flagstar Bank was the 14th largest mortgage lender in the country by dollar volume in 2020. In the company’s most recent annual report, Flagstar said it had $ 48.3 billion in mortgages last year, including $ 6.9 billion in jumbo loans.

Most of that business – $ 22.9 billion – was bought through the correspondence channel from unaffiliated banks or mortgage lenders that operate in all 50 states. Flagstar’s 141 retail locations in 28 states added $ 14.4 billion in loans, while a network of 1,400 mortgage brokers generated additional $ 11 billion in home loans.

The New York Community is a leading multi-family loan company in New York City that specializes in “non-luxury homes with rental-regulated units with below-market rents,” the company said in its annual report.

As of the end of 2020, Flagstar had 5,214 full-time equivalents while the New York community reported 2,948 employees, including 1,635 retail employees and 1,313 back office employees.

S&P Global analysts said bank mergers and acquisitions rebounded in the final quarter of 2020 after a pandemic-triggered slump. In the last three months of the year, 50 transactions were announced, including PNC Financial Services Group Inc.’s agreement to acquire BBVA USA Bancshares Inc. for $ 11.57 billion and Huntington Bancshares Inc.’s agreement to acquire TCF Financial, based in Detroit Corp. for $ 5.92 billion.

With M&A activity nearly stalling in the second quarter, analysts at S&P Global tracked just 112 transactions totaling $ 27.67 billion in 2020, compared with 258 transactions worth 55, $ 05 billion in 2019.

Email Matt Carter

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