MSR owner Marlin Mortgage buying originator LoanFront

Marlin Mortgage Holdings, an owner of mortgage servicing rights, has agreed to purchase direct-to-consumer lender LoanFront.

Terms of the transaction have not been disclosed.

“The LoanFront acquisition serves a few strategic milestones: adding internal capabilities for retention efforts of the approximate 130,000 existing Marlin borrowers and access to an existing platform to assist in our planned expansion into Ginnie Mae mortgage servicing rights,” said Andrew Weber, Marlin Mortgage CEO, in a press release.

The deal was announced on Oct. 20, the day before Ginnie Mae pushed out the implementation date for its nonbank risk-based capital rule until Dec. 31, 2021.

Steve Stone, LoanFront CEO, will remain in his position after the transaction is completed. The lender started in business in late 2021.

“We’ve been impressed with what he and his team have achieved in such a short timeframe,” Weber said. “The move demonstrates our ability to expand into a business segment where most are exiting.”

Marlin Mortgage itself is a recently created company, established in 2019 to serve as a clearing platform for buying and selling residential MSRs. It currently owns $45 billion of Fannie Mae and Freddie Mac servicing rights.

Its clearing platform provides institutional investors with virtual access to the skills and tools required to own MSRs, while minimizing the operational liabilities associated with ownership, control, and regulatory compliance. An affiliate, Marlin Manager manages $600 million of institutional investor capital commitments.

“Joining the Marlin team was a no-brainer for LoanFront,” Stone said. “We are confident that our team will make a great addition and add immediate value.”

While declining volumes have prompted speculation about industry consolidation, particularly regarding large publicly traded companies, the action lately has been around small and mid-sized firms hooking up.

This includes Vellum Mortgage of Fairfax, Virginia, and JVM Lending of Walnut Creek, California, creating a strategic partnership; Thrive Mortgage acquiring American Mortgage Service; Real Brokerage picking up LemonBrew; and Select Mortgage Services buying certain assets of Rushmore Loan Management Services.