This article reflects on the 2008 M&A market in the mortgage sector, as well as articulates the outlook for the mortgage banking M&A landscape in 2009. This article suggested that the following themes would encapsulate mortgage M&A deal flow in 2008: 1. activity in mortgage servicing platforms; 2. focus on the prime credit spectrum in origination platforms, with a strategic objective to position for a refinance wave; 3. private equity participants to act as contrarians to secure an entry platform and align with seasoned management teams, with the ambition to roll up and consolidate market share among independents; and 4. the need for greater capital permanency would transition more of the mortgage banking business model to operate within a depository. As the economy eventually recovers, consumers will develop an appetite for flavors other than vanilla. Alternative forms of mortgage capital will develop for jumbo product and nonagency criteria (interest only, limited documentation, self-employed).
Mortgage Banking M&Amp;A: 2008 Review and 2009 Outlook
Market prophesy is a challenge under normal circumstances and increasingly nuanced in an environment where the Federal Reserve lowers the Fed Funds rate to an unprecedented low of 0.25 percent, Treasury Bills trade at negative yields, and global stock markets lose more than $30 trillion in value from their peak levels. Much has been written about AIG, Bear Stearns, Lehman Brothers, Fannie Mae, Freddie Mac and the "flavor of the month" in government programs. The commonality among these events is the crisis in the housing market.While the ...