New America acquires certain assets of Draper and Kramer

New American Funding has signed a letter of intent to purchase the single-family mortgage financing business and employees of Chicago real estate and financial services firm Draper and Kramer, according to the buyout firm.

Financial terms of the deal were not disclosed.

This acquisition is the second in the history of New American Funding. The last acquisition was The company purchased Marketplace Home Mortgage in 2018. Chief Executive Rick Arvielo said it may consider other acquisitions if they are a good fit in terms of price, company culture and location.

“We’re hoping to find other similar opportunities because we’re not in many parts of the United States. So that could be a potential real strategy for us to grow,” he said. “But if we look for other opportunities, there has to be real synergistic value or geography. value.”

Asked whether the acquisition would change New American Funding’s size rankings, Arvielo said that remained to be seen and that the purpose of the deal was not to increase production but to expand geographic reach. Market Liquidity Intelligence data shows New American ranks 12th among independent companies in its category. The home mortgage industry is retail non-bank, Avillo said.

“We now have an opportunity to fill the patchwork in these regions,” he added, noting that the single-family assets of Draper and Cramer will help the Southwest-based New America Fund build more presence on the East Coast and elsewhere. .

NAF is transforming its lending pipeline and staff at acquired companies, plans to expand its originations by adding loan officers, underwriters and processors, and will selectively review corporate positions and other operations.

“We look at everything from the perspective of the best interests of consumers and practitioners seeking business. We look at what makes the most sense for them and what makes the most economic sense,” Avillo said. “I think we have the best, but as you grow, there are holes that need to be filled. So we’re excited to have the opportunity to fill some of those holes.”

In response to questions about broad merger conditions Mortgage business under pressure Where does it come from? Until recentlyWhile there has been upward pressure on prices, Avillo reiterated that he has limited experience with acquisitions and generally sees pricing in favor of buyers.

“When I look at the situation, I would say it’s more of a buyer’s market today when it comes to mortgage originations,” he said.

Aveiro emphasized that New America Fund plans to be very cautious about further investment in acquisitions.

“I would like to be more aggressive in my strategic approach and my geographic approach, but I would be very conservative as it relates to making sure that New America doesn’t put any undue pressure on itself by swinging back and forth. We’re very happy with organic growth,” he said. “This is better than any time in 20 years, but I do like the idea of ​​strategic acquisitions.”

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