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Guild Mortgage set to acquire, rebrand Academy Mortgage

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Guild Mortgage says it’s poised to grow loan originations by 25 percent and become the eighth-largest nonbank retail mortgage lender in the U.S. with an agreement to acquire Utah-based direct lender Academy Mortgage.

Academy Mortgage Chairman and CEO Adam Kessler will join Guild’s senior leadership team, with Academy branches operating as a division within Guild and, eventually, rebranding as Guild offices, the companies said Tuesday.

Terms of the deal and the expected closing date were not disclosed, but Academy will be the sixth lender acquired by San Diego-based Guild since 2021, including last year’s acquisitions of First Centennial Mortgage, Cherry Creek Mortgage and Legacy Mortgage.

Each of those acquisitions “has brought new talent to Build, making us a better company,” Guild CEO Terry Schmidt said in a statement.

Terry Schmidt

Terry Schmidt

“Guild and Academy share a commitment to the purchase mortgage market and believe in local sales and fulfillment that builds on our customers for life strategy,” Schmidt said. “Our aligned core values attract employees dedicated to serving their communities and delivering on the promise of homeownership.”

Upwards of 1,000 Academy Mortgage employees will make the transition to Guild, including more than 600 licensed mortgage originators, Guild said in announcing the deal. A spokesperson for the company declined to say whether any employees would be laid off.

Founded in 1988 and based in Draper, Utah, until recently Academy Mortgage Corp. sponsored 839 mortgage loan originators who worked out of 218 branch locations serving 49 states and Washington, D.C., according to records maintained by the Nationwide Mortgage Licensing System and Registry (NMLS). Guild had sponsored 2,247 mortgage loan originators working from 643 branch locations, according to NMLS records.

Guild said after the deal closes, it will employ more than 2,100 mortgage loan originators and that, based on Academy’s $5.59 billion in 2023 loan production, the combined company will have 1.3 percent market share among non-bank retail mortgage lenders.

In its most recent quarterly earnings report, Guild said that expenses associated with salaries, incentive compensation and benefits in its origination segment decreased 26 percent during the first nine months of 2023 to $344 million, due to reduced headcount and declines in origination volume.

With in-house originations falling 29 percent to $11.4 billion, Guild’s originations segment posted a $46.9 million loss for the first nine months of the year.

Bumps in the road for Academy Mortgage

In addition to the difficulties that rising mortgage rates have created for all lenders, privately-held Academy Mortgage has faced other bumps in the road.

In 2022, the company agreed to pay $38.5 million to resolve allegations by a whistleblower, former Academy underwriter Gwen Thrower, who claimed that from January 2008 through April 2017, Academy Mortgage employees often disregarded FHA rules and falsely certified compliance with underwriting requirements.

Under the terms of the settlement, Thrower was to receive $11.5 million, her share of the settlement proceeds under whistleblower provisions of the False Claims Act. Thrower’s claims of wrongdoing by Academy “are allegations only and there has been no determination of liability,” the Department of Justice noted at the time.

Academy Mortgage, which did not respond to a request for comment on the pending acquisition, continues to offer a full suite of loan products, including FHA, VA, USDA, conventional and jumbo mortgages.

More recently, Academy Mortgage was the target of an apparent ransomware attack that has resulted in lawsuits seeking class-action status to represent victims. Attorneys for Academy Mortgage notified Maine regulators in December that the personal information of 284,443 consumers nationwide may have been compromised in a March 2023 data breach.

Academy Mortgage offered affected consumers 12 months of free credit monitoring, saying it had determined that their date of birth and Social Security number could have been accessed by an unauthorized third party.

Although the ransomware group known as ALPHV reportedly claimed responsibility for the attack last May, Academy Mortgage said its investigation into the incident wasn’t completed until November.

Blackcat, ALPHV or Noberus, has allegedly infiltrated the computer networks of more than 1,000 victims, “including networks that support U.S. critical infrastructure,” the Department of Justice and FBI warned in a Dec. 19 bulletin.

The list of mortgage and title insurance companies that have been targeted by hackers in recent months includes loanDepot, Mr. Cooper, Fidelity National Financial and First American Financial.

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