California-based American Pacific Mortgage scooped up close to half of Finance of America’s recently laid off employees and about 40 of its offices, according to an executive at APM.
The absorption of some of FOA’s offices into APM happened within the past month, following the Texas-based lender announcing its exodus from retail and wholesale origination. The move is technically not a merger or an acquisition since no money was exchanged.
FOA declined to comment, with a spokesperson noting company policy “to not comment on rumors or speculation in the market.”
Though no price tag was attached, there have been benefits for APM.
“We aren’t truly buying anything, such as their obligations,” said the source. “We’re basically getting the benefit of getting all of their production, but not having to buy the company.”
“We are working with the lender to see what they’re going to let us keep,” APM’s executive said. “We are getting phones moved, internet service providers, printers, scanners, network equipment, computers, but since they’re closing, it’s a little bit easier because they’re going to let us take some of their stuff.”
A brief search through LinkedIn shows that in the past couple of weeks close to three dozen employees from FOA transitioned to AMP. Most former FOA employees who transitioned are located on the West Coast.
Last week, Graham Fleming, the CEO of Finance of America, acknowledged that the decision to exit forward originations would have an impact on FOA’s employees.
“We are providing support and resources to assist our departing employees in their search for employment opportunities and are actively working to facilitate the transition of many of these employees to roles at other mortgage lenders,” he said.
The executive at APM said that they were one of the first lenders contacted by FOA to try to place employees and “that enabled APM to get in front of the producers, since our cultures match very similarly.”
This is not the only instance of APM hiring in bulk from a struggling origination shop. In 2014, Guarantee Mortgage – and its 120 employees – incorporated into AMP. The origination shop kept its name, but was integrated with American Pacific systems.
At the time, Kurt Reisig, chairman at APM, said that the California-based lender is growing thanks to small independent shops joining it and benefitting from a larger scale operation.