The Irvine-based correspondent brokerage, West Capital Lending, announces its acquisition of Pennsylvania-based brokerage, Red Tree Mortgage, LLC. Already licensed in 47 states, West Capital is looking to expand further into the East Coast and penetrate those markets through the acquisition of small, locally embedded brokerages.
West Capital’s vice president of Business Development, Matthew Blackmer, shared his excitement about joining forces with his long-time acquaintance Alex Reinig, president and CEO of Red Tree Mortgage.
“I specifically had the pleasure of working with them during my tenure at Rocket [Mortgage] right when they were really getting up and running,” said Blackmer. “I got to kind of hear their story [about] why they chose the name Red Tree Mortgage —because their home had a red tree in the back of it.”
Likewise, Reinig told NMP that his relationship with West Capital co-founders Daniel Iskander and Eric Hines stem from their partnerships with Rocket Mortgage.
“I have been part of an inner circle of executives and owners for some time now where we lean on one another for all business initiatives,” Reinig said. “Danny and Eric have always looked for ways to revolutionize our business while creating an amazing company culture.”
Blackmer expressed that, like West Capital, Red Tree Mortgage has an empathetic and personalized client approach, saying they are a “very local, familial based organization that prides themselves on connections and relationships first, while still operating at a very high capacity.”
Red Tree Mortgage
Red Tree Mortgage formed in 2019 and currently employs eight loan officers. All of them must be busy bees, since Modex shows that the small team was able to close about $22 million in volume among 79 loans in the past 12 months.
Data from Modex also shows the extent that Red Tree Mortgage is locally-focused, sourcing the bulk of its business (68%) in Pennsylvania, followed by Georgia and Virginia. The company pipeline totes many attractive borrowers, since nearly 70% of the loans it originates are conventional purchase loans. But Red Tree Mortgage also offers VA loans, FHA loans, investor loans and more, according to its website.
As loyal Rocket broker partners, Red Tree Mortgage sent slightly more loans (56.8%) to Rocket than West Capital Lending (51.7%) in the past year, according to Modex. Additionally, the split between brokered loans and banked loans for Red Tree Mortgage is roughly 60% and 40%, respectively. West Capital brokered 76.3% of their loans and banked 23.7%.
"In the years of knowing these guys I see glimpses of what my company, Red Tree Mortgage, entails, and coupled with the goals West Capital has for the East Coast this only made sense,” Reignig told NMP. But as for his team, he said “My team of loan officers will now have access to some of the best technology, leads and pricing in the nation.”
Blackmer expanded on the resources West Capital will be providing the team, saying “We want to make sure that we're providing the best platform to these more localized teams that don't necessarily have the manpower or the resources built into their platform.”
The Personal Touch
Correspondent brokerages often acquire smaller brokerages to scale their companies. But why is West Capital looking to join forces with locally embedded teams, specifically? Blackmer harkens back to the Broker Brawl event at Originator Connect last August, when Iskander competed against three of the nation’s largest broker-owners in front of an audience of originators. Iskander won over the crowd in 2023 but missed out on a second-year streak as NEXA Mortgage CEO Mike Kortas won the heavy weight championship belt.
“If there was one thing that came out of the Broker Brawl this past August,” Blackmer said, "every single mortgage company has that same pitch, ‘we've got great technology, we've got amazing rates, we've got excellent pricing’...We want our individuals to be leading with their knowledge, their expertise, their professionalism.”
However, Blackmer adds, MLOs will have a better chance cutting through the sales pitch by looking at the numbers. A major point for Iskander during the 2023 and 2024 Broker Brawl was the amount of loans the average MLO is producing at West Capital versus the average MLO working for their competitors.
“Look at the numbers and recognize who's eating and who's not,” Blackmer said. “What started the conversation with Red Tree Mortgage was the fact we have built this amazing platform that allows so many people to scale their business to new heights and accomplish their goals because we're putting our team members first. We don't continue to scale and build unless our people are doing so. It's not a matter of ‘just get everyone on our platform and then let's reap the rewards.’”
West Capital Lending also tries to differentiate itself from competitors by allowing the teams they acquire to maintain their own style and individuality in how they run business. So when a client walks in and the show starts, Alex Reinig and his MLOs take center stage as the talent while West Capital Lending acts as its backstage crew, ensuring the technical process of originating can flow seamlessly.
“Their brand is just the platform upon which they're successful,” Blackmer said. “When I think of our top producers, while they are a part of the West Capital brand and family with unlimited support and resources behind them, they're the ones that shine.”
Client Acquisition
"I think if there's anything that we can see right now, there is a very big turning point in terms of the evolution of the way the mortgage industry is going to work and operate," Blackmer added.
In the backdrop, the mortgage industry is currently undergoing many changes in terms of compliance, with trigger leads in the Congressional chopping block, new consent rules for acquiring online leads, and potentially CFPB audits for mega brokers on the horizon. Every one of these changes will impact the client acquisition process for many lenders, including small to large brokerage firms. The FCC's new one-to-one consent rule is top of mind at West Capital.
"We see these legislative pieces that are coming down the pipeline," Blackmer said. "We know what the atmosphere is calling for and we want to make sure that we're ahead of the eight ball where our clients know our faces and they know who we are." He also added: "What's really on our mind [at West Capital] is making sure that our consumers' information and their data is protected."
Blackmer again emphasized West Capital's differentiator, saying, "It's one thing to be a brand, it's another thing to be the professional that is well known and in front of the client. We wanna make sure that is what's first and foremost."
