Full-service residential real estate services company, Realogy Holdings Corp, and independent retail mortgage company, Guaranteed Rate announced a new joint adventure. On Wednesday, the companies announced that their new joint adventure, Guaranteed Rate Affinity, is expected to being doing business in June 2017.
Guaranteed Rate Affinity will originate and market its mortgage lending services to Realogy’s real estate brokerage and relocation subsidiaries, respectively NRT and Cartus. Guaranteed Rate Affinity will also market to other real estate brokerage and relocation companies across the country.
As the two companies announce their new business adventure, PHH announces that it is exiting its joint venture with Realogy, as the company continues to shift its business focus in a different direction.
Guaranteed Rate Affinity will acquire certain assets of PHH’s mortgage operations. Included in the acquired assets are four regional mortgage origination and processing centers, PHH’s relocation division and employees across the United States.
“We are pleased to have reached an agreement with Guaranteed Rate Affinity for the sale of the assets of our PHH Home Loans joint venture. The decision to sell our existing Joint Venture is a result of our review of strategic alternatives,” said Glen Messina, president and CEO of PHH Corporation.
“We believe this outcome represents the best opportunity to maximize the value of this platform and, when combined with the previously announced sale of MSRs, enables us to realize a substantial portion of our balance sheet value,” Messina continued.
Shortly after announcing its plans to sell off its Ginnie Mae mortgage servicing rights portfolio, at the end of last year, PHH also announced its plans to sell its entire remaining mortgage servicing rights portfolio in a massive deal with New Residential Investment.
As PHH reorganizes their business plans, Guaranteed Rate and Realogy are excited to move forward with their new business adventure.
“This is a unique opportunity for us to accelerate our growth on a national level by bringing our cutting-edge technology together with Realogy, a Fortune 500 company,” said Guaranteed Rate CEO and Founder Victor Ciardelli.
“As we evaluated potential new options for our mortgage origination venture, Guaranteed Rate was clearly the right strategic partner to help our company-owned brokerage business and its affiliated sales associates offer an innovative and streamlined mortgage process built on best-in-class technology,” said Richard A. Smith, Realogy’s chairman, CEO and president.
Guaranteed Rate Affinity and Realogy will own 49.9 percent stake and the remaining 50.1 percent stake will be controlled by Guaranteed Rate. The transaction is expected to close in the fourth quarter of 2017.