In the wake of the fallout from the financial crisis, Manhattan’s largest independent mortgage broker — 27-year-old Manhattan Mortgage — has been acquired by the Chicago-based mortgage lender Guaranteed Rate.
“It was time to be part of a bigger bank,” said Manhattan Mortgage founder Melissa Cohn, who is now an executive vice president at Guaranteed Rate.
Mortgage brokers have faced tough times since the subprime mortgage crisis, Cohn said, with many of her competitors going out of business. As The Real Deal has reported, a number of banks have recently shuttered their wholesale lending divisions, effectively ending their work with mortgage brokers.
“The biggest difficulty was the loss of Citibank from wholesale and Wells Fargo from wholesale,” Cohn said. “We lost two big resources for condo and co-op loans.”
Joining forces with Guaranteed Rate, she said, will allow her company’s 70 brokers “to originate loans they might not have had a home for before merging.”
Rapidly growing Guaranteed Rate already had 134 offices across 47 states, but “one area where we had a gap was Manhattan,” said Guaranteed CEO Victor Ciardelli. “Manhattan Mortgage was perfect for us to build our presence and fill it in.”
Manhattan Mortgage’s six offices — two in Manhattan, two in the Hamptons, one in Brooklyn and one in Westchester — will give Guaranteed Rate a firm foothold in the New York City market, he added. Now Ciardelli said his goal is to start recruiting the best loan officers in the area.
For Cohn, the merger means the end of an era.
“Of course, it’s bittersweet,” she said, “but it’s onward and upward.”