Non-QM lender A&D Mortgage has entered a definitive agreement with Mr. Cooper Group to acquire the third-party origination (TPO) platform that Mr. Cooper Group acquired from Flagstar Bank last fall.
Adding these wholesale and non-delegated correspondent channels is expected to expand A&D’s pool of broker partners to 8,500 — and expand their originate-to-securitize model into the agency space.
Victor Kuznetsov, founder and managing partner of Imperial Fund Asset Management, A&D’s liquidity partner for 100% of its collateral, spoke with NMP about the deal after it was announced Thursday afternoon.
“First of all,” he explained, “I would say it is a 100% conventional platform." The acquisition will allow the company to expand the reach of its Non-QM products, while adding more conventional loan volume to the Fannie-Freddie business it already does.
“We’re going to teach our new employees our products, our Non-QM products, and they’re going to go and source these products through their broker networks,” he said. “For us, it’s a new channel to originate more Non-QM as well as conventional.”
In an wide-ranging interview with an NMP last October, A&D’s CFO, Andre Gunin, projected that the company’s loan volume would grow by 25-30% in 2025.
A month prior, A&D announced a joint venture with Atlas Merchant Capital, an asset management firm, to support the expansion of A&D’s then-$7 billion mortgage securitization platform by attracting more institutional investors to A&D’s securitizations.
The deal announced today marks a “a huge add-on to our platform because we’re ready technologically to increase our capacity of origination. We’re ready financing-wise,” Kuznetsov said. Through these liquidity partners, A&D has been raising a fund that it’s now looking to deploy into mortgage securities.
“We’re going to get a better geographic composition of our pool through this acquisition because the penetration of this acquisition is really large. It’s a big conventional platform. They have a bigger relationship with conventional brokers," Kuznetsov said.
“Our investors who buy our bonds are going to be happy that we are going to be able to slightly decrease the Florida concentration and increase concentrations in other states. It’s very, very beneficial for us,” he added.
As of September 2024, the company had originated over $10 billion in loan volume since 2020, while managing a servicing portfolio exceeding $8 billion. In today’s announcement, A&D’s chief operating officer, Lana Izgarsheva, said, “It took almost three years of screening candidates and finally we found what we were looking for,” resulting in the purchase of Flagstar's former TPO platform.
What made the acquisition of this platform appealing according to Kuznetsov, was A&D’s thought that Mr. Cooper's priority in last year's bundled transaction with Flagstar was the mortgage servicing rights (MSRs).
“It was not that hard to acquire,” he said, calling the negotiation “nice and polite. It took us a limited amount of time to finalize the deal, seal the deal, and make it happen.” Kuznetsov says the negotiations began at the end of last year.
“We’re getting good people, we’re getting good employees, we’re getting good management teams, and we’re getting bigger conventional volumes,” he added, which Izgarsheva echoed in the press release.
“The deep expertise in the mortgage business, the high-tech culture, and most importantly, the core values of the team — these are things we are similar in,” she said.
“We took a very careful and measured approach to finding a potential partner to grow our QM business,” said Max Slyusarchuk, CEO of A&D Mortgage, in the announcement. “A&D’s goal is to be an industry leader, and this transaction is a big step forward.”
Mr. Cooper Group did not immediately respond to a request for comment.
