Guild Mortgage acquires Cherry Creek Mortgage

Retail lender Guild Mortgage announced the acquisition of Cherry Creek Mortgage, a privately-held Colorado-based lender with 68 branches in 45 states.

Cherry Creek will become its own division of Guild, headed by co-founder Jeff May, Guild said on Monday. The terms of the acquisition were not disclosed.

Established in 1987, Cherry Creek offers a wide range of mortgage products including conventional, FHA, VA USDA, USDA, reverse mortgages and home renovation loans.

Cherry Creek brings its know-how with reverse mortgages to Guild, which represents a new opportunity for Guild.

“We continue to look for potential new partners with strong local teams, a history of growth and community commitments,” Mary Ann McGarry, CEO of Guild, said in a statement. 

Cherry Creek, a Colorado-headquartered retail lender, was among the originators looking to expand over the summer — it was hiring operation positions in Colorado and LOs in Nevada, Arizona, Colorado and California.

Cherry Creek originated $4.07 billion in 2022, a decline of about 44% from the previous year’s $7.27 billion, according to mortgage data platform Modex. Of the total origination volume in 2022, purchase mortgages accounted for 57% of the volume and refis consisted of 28%.

Cherry Creek has 299 mortgage loan officers, according to the Nationwide Multistate Licensing System & Registry (NMLS).

Guild has been acquiring lenders to expand in local markets in a purchase mortgage-focused environment. 

In December, Guild acquired Wisconsin-based lender Inlanta Mortgage to increase its purchase market share to fifth in Wisconsin. Guild added New-Mexico-headquartered Legacy Mortgage last month to have the second-largest purchase mortgage share in Arizona, Colorado, Texas, and New Mexico, according to the firm.

Executives had affirmed the lender’s plans on acquiring other companies in its latest earnings call.

“We believe we can continue to realize attractive growth through M&A, particularly as we anticipate ongoing dislocation in the market,” Terry Schmidt, president of Guild, told analysts this month. 

In 2022, more than 80% of closed loan origination volume came from purchase mortgages, the firm said. In the fourth quarter alone, 93% of Guild’s closed origination volume was derived from purchase business.

On the back of a purchase market-focused strategy, Guild posted a net income of $328 million in 2022 despite posting a loss of $15 million in the fourth quarter of the year. Net income also rose 16% from the previous year’s $283.8 million. 

Executives during the earnings call hinted at additional acquisitions noting “there is a lot of interest for a lot of production companies to find out options.”