1st Metropolitan Mortgage of Charlotte, once a top-ranked loan brokerage and net branch operator, has agreed to sell itself to Hestia Financial of Dallas.
Daniel Jacobs, 1st Metropolitan's president, confirmed the sale arrangement late last week but declined to talk about price. He said the transaction could close within 30 to 90 days, pending regulatory approvals.
1st Metropolitan would merge with Mirad Financial Group, a lending subsidiary of Hestia. Mirad and 1st Metropolitan both have approvals to fund Federal Housing Administration loans, the hottest product in the industry right now.
Jacobs said remaining a loan brokerage is no longer a realistic option for his company.
"The broker environment is becoming more and more hostile," he said, citing the number of lenders quitting the wholesale channel and the new Home Valuation Code of Conduct rules that went into effect May 1. Those rules, which govern loans sold to Fannie Mae and Freddie Mac, forbid brokers from ordering appraisals.
Jacobs said 1st Metropolitan has wanted to be a mortgage banker for quite some time.
Little is known about Hestia Financial, but a notice on Go Big Network, a Web site for start-up companies, says its business plan is "to combine mortgage brokers into a mortgage banking platform." Hestia's chief executive is Patrick McGeeney, but there is no listing for the company in the Dallas phone book. The Web site notice says Hestia has signed letters of intent with a mortgage banking firm and at least one loan brokerage.
In 2007 1st Metropolitan ranked fourth nationwide among loan brokerage firms in loan production, with $2.4 billion.