The New York City-based REIT will pay $120 million in cash for national non-Qualified Mortgage lender HomeXpress Mortgage Corp., plus 2.08 million shares in Chimera valued at $27.9 million.
Bigger. Better. Bolder. Inman Connect is heading to San Diego. Join thousands of real estate pros, connect with the Inman Community, and gain insights from hundreds of leading minds shaping the industry. If you’re ready to grow your business and invest in yourself, this is where you need to be. Go BIG in San Diego!
HomeXpress Mortgage Corp., a national provider of non-QM mortgages that are popular with gig workers, is being acquired by a New York City-based Real Estate Investment Trust (REIT), the companies announced Thursday.
Chimera Investment Corporation will pay $120 million in cash for HomeXpress, plus 2.08 million shares in Chimera valued at $27.9 million at Wednesday’s closing price of $13.89.
HomeXpress President and CEO Kyle Walker and key members of his senior management team will continue to lead HomeXpress as a Chimera subsidiary.
Phillip Kardis
HomeXpress’ loan origination platform “is expected to create a powerful combination and enhance our enterprise value,” Chimera President and CEO Phillip Kardis said in a statement. “HomeXpress has an excellent management team with experienced origination professionals that have a long history of serving broker and correspondent partners across the U.S. ”
Chimera is in the business of acquiring, financing and securitizing non-Qualified Mortgages (non-QM) that don’t meet Fannie Mae and Freddie Mac’s strict underwriting and documentation requirements. Because of their more flexible income verification requirements, non-QM loans are popular with self-employed gig workers and others with non-traditional sources of income.
Combining HomeXpress’s origination capabilities with Chimera’s ability to manage, finance and securitize non-QM loans “will create a powerful platform that further anchors our position as a leader in the residential credit sector,” Chimera disclosed to investors in a deal summary.
HomeXpress mortgage originations 2020-2024
HomeXpress mortgage originations (* 2025 projected). Source: Chimera Investment Corp. regulatory filing.
HomeXpress has originated $10.7 billion in loans since launching in 2016 and has always been profitable, generating $47 million in 2024 pre-tax earnings, Chimera disclosed.
Acquiring HomeXpress is “the next logical step in the evolution of the company” following last year’s acquisition of alternative asset manager Palisades Group for up to $50 million, the company said.
Santa Ana, California-based HomeXPress is licensed in 41 states and Washington, D.C., sponsoring 13 mortgage loan originators who work out of four branches, according to Nationwide Mortgage Licensing System records.
HomeXpress originated 5,982 mortgages last year, most of them (53 percent) refinancings, according to Home Mortgage Disclosure Act (HMDA) records analyzed by iEmergent.
HomeXpress 2024 loan originations by county
HomeXpress 2024 loan originations by county. Source: iEmergent.
Most of the company’s business tracked by HMDA was generated in three states — California ($623 million in originations), Florida ($412 million) and Texas ($280 million) — with other contributors including Arizona ($81 million), Washington ($66.6 million) and Nevada ($58.8 million).
As a Chimera subsidiary, HomeXpress will be positioned to expand its product offerings and grow strategically, Walker said.
Kyle Walker
“By combining platforms and assets, Chimera and HomeXpress are poised to deliver enhanced value to HomeXpress’ borrowers and further strengthen its relationships with its many business partners,” Walker said in a statement.
A&D Mortgage — which claims to be the nation’s biggest provider of non-QM mortgages — last month announced it had acquired loan servicer Mr. Cooper’s wholesale and non-delegated correspondent mortgage business.
The integration of Mr. Cooper’s third-party originations team provides A&D Mortgage’s partners with access to a suite of more than 20 mortgage programs, including agency, government, jumbo and non-QM, with enhanced operational efficiency and “industry-best turnaround times,” the company said in announcing the deal.
A&D Mortgage originated 8,369 loans in 2024 totalling $2.93 billion, and two-thirds of those loans were purchase loans taken out by homebuyers, according to iEmergent’s HMDA records.
“Broadly speaking, we like non-QM origination businesses because the returns can be high, and it thematically represents a growth zone of the mortgage market catering to non-traditional situations and self-employed borrowers,” BTIG analyst Eric Hagen said in a note to clients. “The risk is a disruption in credit markets and a widening of securitization spreads which leaves issuers and loan aggregators saddled with warehousing more interest rate and credit risk on their balance sheets.”
Hagen said Chimera’s expectation that HomeXpress could fund $3.5 billion in loans this year implies that the company might need to raise $200 million to $300 million in capital if it were to keep those loans on its balance sheet.
While BTIG is neutral on Chimera, the deal valuation casts other mortgage REITs with non-QM lending businesses in a favorable light, Hagen said. BTIG has a “buy” rating on Chimera competitors Angel Oak Mortgage REIT, Ellington Financial and Rithm Capital Corp.
Editor’s note: This story has been updated with insights from BTIG analyst Eric Hagen.
Get Inman’s Mortgage Brief Newsletter delivered right to your inbox. A weekly roundup of all the biggest news in the world of mortgages and closings delivered every Wednesday. Click here to subscribe.
Email Matt Carter
