The mortgage industry is seeing another merger-and-acquisition deal, with Carrington Holding Co. adding a new channel to its mix through its purchase of a suburban New York-based residential lender.
The owner of several businesses providing services to the real estate and mortgage industries, Carrington announced an agreement to acquire Reliance First Capital from its parent holding company Tiptree Inc. The acquisition is expected to close in the first quarter of 2026.
“Together with our existing retail recapture, wholesale and correspondent businesses, our agreement to acquire Reliance First Capital looks to add a direct-to-consumer channel, making our mortgage platform more balanced, more competitive and more resilient,” The Carrington Cos. CEO Andrew Taffet said in a press release.
The announcement came on the same day publicly traded Tiptree issued its most recent quarterly earnings. The holding company of several small and middle market financial firms reported it agreed to the sale of Reliance for 93.5% of tangible book value at time of closing, or $51 million of estimated gross proceeds as of Sept. 30.
Piper Sandler served as exclusive financial advisor to Reliance during the acquisition.
In addition to complementing the mortgage lending services it already offers, the upcoming merger with Reliance adds another line of business to Carrington’s suite of companies. Outside of home lending, the company operates a servicing platform, a capital management firm and real estate sales and closing solutions through its Vylla brand.
“Our agreement with Tiptree to incorporate the employees and capabilities of Reliance First Capital into our family of companies is much more than an acquisition,” Taffet added. “It’s an important investment in the future of The Carrington Companies.”
What Reliance brings to Carrington
While Carrington’s retail lending currently focuses on the recapture of existing servicing customers, Reliance’s direct-to-consumer strengths will help bring a new pipeline of customers, a company spokesperson said.
Headquartered in Melville, New York, Reliance serves borrowers across the country, with a headcount of 315 employees and six call centers. The lender produces approximately $1 billion in volume annually, with a servicing book of more than 16,000 customers and $3 billion in unpaid balance, which will move onto Carrington’s platform.
“Carrington’s broad mix of businesses will help us to continue to grow and execute our mission to help homeowners and prospective homeowners receive the right mortgage for their personal financial goals.” Reliance First Capital President and CEO Hugh Miller also noted.
In addition to new originations potential, Carrington credited Reliance’s resilience through market cycles and proprietary loan-origination system and other technologies behind its purchase, which will place it in a strong position for servicing recapture opportunities.
An active M&A year
The latest merger comes in what has turned into an active year for mortgage M&A, with servicing recapture a prominent theme behind the biggest transactions. Rocket’s purchase of Mr. Cooper spotlighted the value servicing portfolios serve as a pipeline for new origination activity, leading to strategy pivots from many of the newly combined mortgage giant’s lending and technology competitors.
Since the Rocket-Mr. Cooper announcement, the industry has also seen a major lender-servicer deal involving Guild Mortgage and Bayview Asset Management.
The new Carrington acquisition is the second M&A agreement announced this week, following the sale of loan technology platform Mortgage Cadence to software enterprise Partnerone.
