The non-QM market has been so hot this year that M&A activity is beginning to pick up a head of steam. Luxury Mortgage is the latest lender to pull the sale ripcord. There could be more.

HPS Investment Partners, a firm chock full of Wall Street veterans, has agreed to buy non-QM lender Citadel Servicing Corp. After the sale closes, CSC founder and CEO Dan Perl will part ways with the firm.

Origination pipelines remain full and lenders, for the most part, are feeling optimistic about profits. Can it last? Probably, as long as rates remain low.

Remember when rates ticked up a few weeks ago? Forget about it. Rates fell again, applications are strong and pipelines are full.

Based on reports from non-QM lenders Angel Oak and Citadel, the third quarter was a strong one for most originators. Meanwhile, the Ditech wind-down is almost over.

Bulk mortgage servicing sales have been slow in the third quarter, but that doesn’t mean bidders have been hibernating. If rates rise just a little bit and stay there, auctions of MSRs could boom.

Growth in subservicing contracts slowed a bit in the second quarter as con-tinued low interest rates took their toll. It’s anticipated that once rates in-crease, more vendors could disappear through M&A.

Will the third quarter be better than the second for originators? Looks that way. Meanwhile, mortgage M&A advisor Houlihan Lokey might wind up as one of Treasury's GSE advisors.

 

Mortgage M&A activity is on the light side these days. The reason: Home lenders are too busy originating new loans and reaping the profits. Unless rates spike, the situation is unlikely to change.

After acquiring a mortgage lender, Zillow planned to expand originations. However, issues with technology have slowed its hiring plans.