Great outcomes are possible with the seasoned M&A team at MorVest leading the way.

 

It is fair to say that the mortgage industry has been consolidating in recent years due to a combination of ever increasing capital/liquidity requirements and periods of extreme margin pressure. While higher volume/margins in refinance markets can periodically result in improved operating results, we expect industry conditions to remain challenging going forward and the trend towards consolidation to remain intact.

 

MorVest specializes in assisting clients with liquidity and capital solutions and sometimes improving cost efficiencies and generating cash from maximizing bank provided borrowing opportunities on MSRs or other working capital facilities is sufficient. In many cases however, adding capital is critical to the ability to survive and thrive. Mezzanine capital in the form of subordinated debt and preferred stock are options for larger IMBs with excellent long-term track records, but is generally unavailable to most players. 

 

The best solution for some companies may be to sell an equity stake. However, the ability to sell a non-controlling interest is not available to most IMBs and in any case investors in such deals would be reluctant to pay more than book value, causing the effective cost of capital to be dear indeed. This leaves selling a controlling interest in the firm. We know this is not an easy decision, but we have witnessed an increasing number of players electing to do in recent years which we expect will continue once COVID-19 impacts subside. 

 

If you are pondering the sale of your mortgage company, it is important that you discuss your options with a trusted advisor with deep industry knowledge and M&A experience. We understand your business model, how it works, its seasonality and how to navigate the entire process in a manner that maximizes your outcome.

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What is your company worth? We can tell you.

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