Overheard last night at a bar here in Austin, Texas: “It’s hotter than the hinges to the gates of hell.” Not so hot, as residential lenders know, are volume and mortgage rates (which some believe may drift down during the final five months of 2023). No one can predict interest rates with any degree of accuracy or confidence, so originators should optimize the current situation with the cards they have been dealt, which aren’t always good. Speaking of which, an owner of a non-bank lender who was doing $40 million a month a few years ago and who is now doing $10 million a month wrote, “Rob, are you hearing that, in the acquisition of a lender, that all the premium is gone, and that deals are comprised of just an earn out over 2-3 years?” Yes, I am hearing that, for lenders doing $10 million a month. But every deal is different, and for companies that were doing $80 million a month and are now doing $30 million, then there might still be a premium. You should check with someone like STRATMOR M&A partner Garth Graham for particulars. (Today’s podcast can be found here and is sponsored by Candor. Candor’s patented automated underwriting decision engine, CogniTech, is a state-of-the-art, 100 percent machine platform that can handle infinite loan scenarios. Listen to an interview with LoanCare’s Rodney Moss on how subservicers are winning business and what to expect in the servicing space for the remainder of 2023.) Lender and Broker Software, Products, and Services