Real estate investment trust Ellington Financial Inc. announced a definitive agreement to acquire majority ownership of national reverse mortgage loan originator and servicer Longbridge Financial.
Ellington Financial agreed to purchase an additional 49.6 percent ownership interest in Longbridge from Home Point Capital Inc. for approximately $75 million. Following the closing of this transaction, Ellington Financial, which has been an investor of Longbridge since 2014, will hold nearly all of Longbridge’s equity.
“Longbridge has cemented its position as a thought leader in reverse mortgage lending, with a proven track record, strong operations, and a commitment to highly ethical practices and best-in-class servicing,” Ellington Financial President and CEO Laurence Penn said. “Significant synergies exist between the Longbridge and Ellington Financial businesses, and we are confident in our ability to work with Longbridge to develop new proprietary products and programs and meaningfully grow its platform in the years ahead. We are excited to continue supporting Longbridge through the next phase of its development and together help build long-term value for shareholders.”
With its eight years of operating history with Ellington, Longbridge will continue to leverage Ellington’s data analysis and modeling capabilities, securitization and capital markets expertise, and permanent capital base. The transaction will also help solidify Ellington’s foothold in the reverse mortgage market, while continuing the growth of Ellington’s loan origination businesses and further diversifying its earnings stream.
“We are incredibly excited that Ellington Financial has increased its commitment to Longbridge – a testament not only to the growth and strength of our company, but also to the opportunities ahead in the reverse mortgage industry,” Longbridge CEO Chris Mayer said.
The transaction is expected to close in the second quarter of 2022, subject to customary closing conditions, including regulatory approval.