Realogy And Guaranteed Rate Enter Into Mortgage Origination Joint Venture Agreement
Realogy Holdings Corp. (NYSE: RLGY), the largest full-service residential real estate services company in the United States, and Guaranteed Rate, Inc. ("Guaranteed Rate"), one of the largest independent retail mortgage companies in the United States, today announced that they have agreed to form a new joint venture, Guaranteed Rate Affinity LLC, which is expected to begin doing business in June 2017. Commencement of operations is subject to the closing of an asset purchase agreement under which Guaranteed Rate Affinity will acquire certain assets of the mortgage operations of PHH Home Loans LLC, the existing joint venture between Realogy and PHH Mortgage, including its four regional mortgage origination and processing centers, its relocation division and employees across the United States.
Guaranteed Rate Affinity will originate and market its mortgage lending services to Realogy's real estate brokerage and relocation subsidiaries, respectively NRT and Cartus, as well as to other real estate brokerage and relocation companies across the country. Guaranteed Rate Affinity also will market its mortgage lending services to a broad consumer audience while leveraging its end-to-end online platform to drive growth in those markets. Guaranteed Rate will own a controlling 50.1% stake of Guaranteed Rate Affinity and Realogy will own 49.9%.
"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 Chief Executive Officer and Founder Victor Ciardelli. "This new partnership aligns deeply with our core values, especially our commitment to 'Work with the Best of the Best.' We appreciate the hard work and commitment of the current joint venture employees during this transition period and we look forward to having them become part of the Guaranteed Rate Affinity team."
"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, Chief Executive Officer and President. "Mortgage financing is a service we have provided for more than 20 years. We are delighted to partner with Guaranteed Rate and are excited to embark on this new relationship that will substantially enhance our service offerings to our customers."
"This joint venture is a positive development that helps to elevate NRT's overall agent value proposition," said Bruce Zipf, Chief Executive Officer and President of NRT, the Realogy subsidiary that owns and operates residential brokerage companies with approximately 800 offices and 47,500 independent sales associates across the United States. "Guaranteed Rate has built one of the market's most trusted brands through seamless technology and outstanding customer service. We look forward to working with them and allowing our independent sales associates to offer their clients access to an innovative online experience."
The asset purchase agreement is subject to approval by PHH Corporation shareholders and certain other closing conditions and is expected to be completed in a series of asset sale closings. The initial closing is expected to occur in June 2017, and the final closing is expected to occur during the fourth quarter of 2017.