Guild Mortgage Expands Reverse Mortgage Division
Announces plan after acquiring Cherry Creek Mortgage, a top 10 HECM lender.
Guild Mortgage says it will integrate reverse mortgages into its platform following its recent acquisition of Cherry Creek Mortgage.
Guild, a San Diego-based growth-oriented mortgage lending company originating and servicing residential loans since 1960, acquired Cherry Creek Mortgage LLC, a privately held Colorado-based lender, last week. The merger added 68 branches in 45 states to Guild’s expanding retail network.
Cherry Creek is a privately held top 10 reverse mortgage lender, as ranked by Reverse Mortgage Insight (RMI).
Guild said Friday it will use its existing retail team in some 300 branches throughout the U.S. to expand reverse mortgage offerings to more borrowers. It will offer turnkey wholesale and correspondent solutions to other lenders wanting to enter the reverse mortgage market, it said.
“The combination of proprietary technology and the broad and established retail network gives Guild the opportunity to advance as a leading retail, wholesale, and closed-loan purchaser of reverse mortgages,” said Bruce Barnes, managing director of reverse mortgages for Guild Mortgage, who joined the company from Cherry Creek. “We believe having the ability to securitize and service the reverse mortgage product will continue to strengthen our offerings and help us to serve more borrowers nationwide.”
Cherry Creek has been a leading player in the reverse mortgage business. For the 12 months ended February, it was the nation's 10th most active originator of Home Equity Conversion Mortgages (HECM), according to RMI. For 2023, it ranks eighth among program participants to date, according to RMI.
“The acquisition of Cherry Creek Mortgage and its reverse mortgage division continues to align with our customer-for-life strategy,” said Guild President Terry Schmidt. “This new combination of resources enables us to expand our business to meet a growing market need.”
A reverse mortgage loan enables the borrower to access equity in a property and use it to supplement retirement income. HECMs are federally insured by the Federal Housing Administration (FHA), a branch of the U.S. Department of Housing and Urban Development (HUD).
HECMs account for nearly all reverse mortgages in the U.S., with an average of 50,000 loans issued annually. Prospective borrowers who are interested in a reverse mortgage loan must be 62 or older; own their home, and use it as their primary residence; own their home free and clear, or have a small amount left to pay on their existing mortgage; and own a single-family, up to four-unit multi-family home, or approved condominium or manufactured home in good condition.
Guild noted that the market for HECM loans is expected to grow. According to the Urban Institute, the number of Americans ages 65 and older will more than double over the next 40 years, reaching 80 million in 2040. The number of adults ages 85 and older will nearly quadruple between 2000 and 2040.