Amy Brandt, the former head of a General Electric Co. (GE) home lender, joined Prospect Mortgage LLC as the company targets a segment of residential lending that larger firms retreated from.
Brandt will serve as the company’s president of correspondent lending, in which closed mortgages are bought from other originators, and servicing as it expands in those businesses, the Sherman Oaks, California-based firm said today in an e-mailed statement.
“We see a tremendous opportunity to greatly expand our national correspondent lending platform” and fill “a void that currently exists in the marketplace,” Chief Executive Office Ron Bergum said in the statement. “Amy knows how to build a successful business. She will play a critical role in guiding the strategy.”
Prospect Mortgage, which is backed by private-equity firm Sterling Partners, joins companies including PennyMac Mortgage Investment Trust (PMT), Fifth Third Bancorp (FITB) and Ocwen Financial Corp. (OCN) in seeking to take advantage of a retreat from correspondent lending by some larger financial firms including Bank of America Corp.
In the business, mortgages are usually bought from smaller originators and then resold as government-backed bonds, with the middleman retaining contracts to service the debt, or handle payments and collections.
Bank of America and MetLife Inc. are among companies that have exited correspondent lending since the middle of last year amid new capital rules and servicing regulations.
The contraction is allowing remaining firms to acquire servicing rights at “significantly” lower prices, Ocwen said in a Nov. 2 filing. Ocwen agreed last month to buy a servicer and lender from Wilbur Ross’s WL Ross & Co. for $750 million.
PennyMac, led by former Countrywide Financial Corp. executives, said yesterday that its volumes rose by 87 percent from the second quarter to $6.3 billion in the period ended Sept. 30.
Brandt helped private equity firm Apollo Global Management LLC (APO) in 2007 create Vantium Capital Inc., which owns a servicer of troubled mortgages, according to today’s statement. She previously led WMC Mortgage, a lender specializing in so-called subprime and Alt-A loans that GE bought from Apollo in 2004 and shuttered in 2007 as defaults on such loans began to soar.
Prospect Mortgage described itself in the statement as among the top 10 providers of loans for home purchases in the U.S.