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Mortgage-Related Mergers Spike In 2014, Could Impact Signing Agents

Merger

This year may be labeled the ‘Year of the Mid-Sized Merger,’ as mortgage-related mergers and acquisitions continue to spike across the nation. The result is a constantly shifting environment within the real estate sector that may impact the connections Notary signing agents have with the companies they work for on a regular basis.

A majority of the M&A transactions involve medium-sized, non-bank financial institutions and lenders. Putting the trend into perspective, a total of 32 mortgage-related mergers and acquisitions were tracked in all of 2013; by comparison, in just the first quarter of 2014 alone, 18 acquisitions had already been reported, according to Mortgage Daily.

And the spiking trend has continued well into the second and third quarters of this year. A blogger for Inside Mortgage Finance last month described the pace of business deals as a “mini tidal wave.”

Merger Activity
 

Localized mergers, such as Michigan First Credit Union’s recent acquisition of mortgage firm Watson Group Financial of Waterford to create Michigan First Mortgage, and other similar transactions, are likely to impact only area signing agents.

Larger transactions may have a more far-reaching impact, such as the September-announced acquisition of full-service mortgage firm Shelter Mortgage Company by New Penn Financial LLC, which will expand the company’s referral network across 30 states; and the merger of Caliber Home Loans and Cobalt Mortgage Inc., scheduled for November, which will result in the two independent lenders forming a new mortgage bank that, according to Mortgage Daily, “would have ranked among the 20 biggest originators last year.”

One trend fueling the spike in merger activity is the nationwide decrease in loan originations, which are expected to fall 30 to 40 percent this year, according to Inside Mortgage Finance.

“Many mortgage lenders are adapting to sharply lower originations by reducing staffing, cutting branches, or shutting down,” said Mortgage Daily publisher Sam Garcia. “However, a good share are acquiring origination operations or agreeing to be acquired.”

How Do These Mergers And Acquisitions Impact Signing Agents?

While signing agents may not be directly impacted, the shifting company structures can result in lost contacts and relationships with former clients and raise lots of questions. Who schedules loan signing assignments? What expectations does the new company have for the signing agents it hires? What do they pay? How do you get paid for outstanding invoices? Here are some suggestions for staying on top of things:

  • Keep Informed: Stay abreast of industry news so you know when mergers and acquisitions take place. If a company that you work for is being merged or acquired, reach out to your contact for guidance. They may remain your contact after the merger, or they may be able to direct you to your new contact. If your contact is no longer there, make sure to introduce yourself to the new contact.
  • Track Your Business: Keeping a careful eye on your assignment schedule and invoice payments can help alert you to potential changes before the merger transition hits.
  • Adjust Your Expectations: If a company you have worked with is acquired, there is no guarantee that your former assignment details, including your fee, will remain the same. Be prepared to establish new agreements and meet new expectations and requirements.
  • Diversify: If you’re a full-time Notary, this market trend offers yet another reason for seeking work in other diverse industries, in addition to your loan signing and real estate assignments.  

Kelle Clarke is a Contributing Editor with the National Notary Association.

1 Comment

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Howard Blum

16 Oct 2014

I believe there is no direct correlation between loan origination organization mergers and how that can have an impact on signing volumes. From my perspective signing assignments are largely assigned by title companies. Sometimes it is directly with signing agents and sometimes it is through the signing service(s) the choose to work with. When I ponder the rhetorical question the answer I come up with is no, there will be no direct or material impact. The overwhelming majority of originations are coming from the “Big Four” banks, so if you are doing their closings you may not notice anything at all.

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