Angel Oak Home Loans sells retail division

Angel Oak Home Loans is selling off a key part of its business, the company said Thursday. 

In a press statement, Angel Oak – an Atlanta-based company that has specialized in lending to both qualified and non-qualified borrowers – said it is, “exiting its retail distribution capability housed in Angel Oak Home Loans” and “entering into a transaction with a leading mortgage lender and servicer.”

Additionally, Angel Oak said the, “transaction includes an acquisition of Angel Oak Home Loans’ brick-and-mortar sales force.” 

But Angel Oak did not say who was buying the retail distribution division, and declined to answer questions. 

Two sources stated that CrossCountry Mortgage, which has aggressively expanded its company over the past few years – much to the chagrin of some rivals – may be acquiring it. A spokesperson for the Cleveland-based company neither confirmed nor denied the move, stating, “We don’t comment on rumors and speculation.” 

The sale shines a spotlight on multiple separately incorporated companies that are brokering, lending, and securitizing mortgages to borrowers in need of nonconventional loans. Besides Angel Oak Home Loans, there is Angel Oak Mortgage, a publicly traded real estate investment company. 

“Angel Oak intends to focus on the non-QM residential mortgage sector through its wholesale and correspondent channels,” according to Angel Oak’s statement. “The transaction has zero impact on the wholesale non-QM originator Angel Oak Mortgage Solutions, Angel Oak Correspondent Lending or any other Angel Oak affiliates. Angel Oak Home Loans will continue to be a part of Angel Oak Companies post transaction and will house the correspondent and consumer direct channels. At this time, Angel Oak cannot comment further.”

Unclear is how the sale will affect employees of Angel Oak Home Loans, which last month laid off 57 of its employees, or about 15% of its workforce. According a story in National Mortgage Professional, a little over half of the company’s staff were mortgage originators.

Like many other mortgage companies who have executed layoffs in recent months, Angel Oak Home Loans blamed macroeconomic forces for the pink slips, which include rising interest rates, sustained inflation and consumer and investor pessimism. A spokesperson said the layoffs were to “manage through the headwinds currently facing the mortgage industry.”