Profitable, Tired & Ready to Sell?

Atlantic Bay Mortgage Group recently lost two producers who combined for roughly $500M over the last 14 months — Will Mullinix to NAF & Ally Cain to Canopy. You might expect its chief lending officer to be bunkering down. But Emily Farley Gardner is hunting instead.

“We have really aggressive growth goals over the next few years,” she told The Mortgage Scoop. “Organic growth is great, but there are opportunities for M&A & we are open to all areas.”

About 400 miles south, John J. Owens is also looking for deals. He built Primis Mortgage, sold it to Primis Bank & still runs the business. Now he wants to acquire small-to-midsize IMBs. There’s a theme here.

In today’s Scoop, we look at the next wave of mortgage M&A, one driven less by distressed sellers than by profitable owners who are tired, undercapitalized for the next cycle &/or simply ready to cash out. Plus, columnist Karen Postiglioni asks why we’re pretending Better’s CEO choice comes down to Vishal Garg or Daniel Lewis, the 10-year Treasury might be well north of 5% in Q1 ‘27 😱 & more.

Talk to any plugged-in mortgage exec & they’ll tell you: there’s a lot more M&A coming in the next six months.

The thing that separates this round of M&A from '23-'24 is that the sellers aren't distressed. STRATMOR's Garth Graham counted roughly 40 transactions last year, up from 25 in '24, & told National Mortgage News in late ‘25 that the bidding has gotten real enough to pull in companies that don't have to sell: "The buyers are paying enough to make sellers, even though they're profitable, take notice."

So who's picking up the phone? Mostly shops that aren't bleeding, but are stuck between cycles.

The first problem is technology. I don’t mean whether they have a decent LOS or POS; I mean whether a $600M lender can realistically keep writing seven-figure annual checks for AI-assisted underwriting, lead generation, recapture technology, data infrastructure, marketing automation & whatever else becomes table stakes.

The other problem: A meaningful number of these lenders were founded in the ’90s or ’00s by dudes now in their 60s & 70s. There’s no obvious succession plan. The kids don’t want the company, can’t run it or both. And for many owners, the business is the retirement account. Put those two things together & you get a very interesting seller: Profitable. Tired. And not especially excited about funding the next five years.

That’s also why I think the “culture” pitch matters so much in this round of M&A. If you’re not selling because the repo man is outside, you can afford to care a lot more about who gets the keys 🚘 ... 

Atlantic Bay has originated roughly $4B over the last 14 months. It’s purchase-heavy, w/ meaningful concentrations in Virginia Beach-Norfolk & Charlotte, licensed in 19 states & adding Ohio & Louisiana.

Gardner is targeting smaller IMBs & brokerages, particularly outside the company’s existing Southeastern strongholds.

“Most aggressive efforts are outside of the Carolinas. Looking at Kentucky, Alabama, Ohio.”

Atlantic Bay doesn’t have much presence in the Northwest or Midwest today, but she said the company is willing to expand licensing “if it makes sense.”

And she’s not thinking small. “The goal is to be a top-5 purchase lender in markets we go after.”

Of course, the obvious question is how a mid-sized lender competes for talent when the Rates, CCMs & NAFs of the world can throw around enormous recruiting packages.

Gardner says Atlantic Bay can “hang” w/ the big boys for the right producer. The pitch is basically: big enough to fund you, small enough to return your call.

“We’ll be attractive to top producers because we can give them a level of support & not feel like they will be on an island or be SO BIG. We can be aggressive & nimble.”

She’s also flexible on structure, including P&L models. Some teams want autonomy & a budget. Others want business-development help & recruiting support.

“Some people just want a budget for expenses & leave me be. Others want help from biz development & to grow a team.”

Gardner thinks the biggest differentiator is ops. “I’m really passionate about not growing at the expense — you need capacity. Our owners have put us in a great financial position to add flexibility to staff up.”

Atlantic Bay runs a one-team model, meaning the same processor, closer & underwriter work the file, & it offers a pod structure as an alternative.

The growth math is fairly aggressive: roughly 10% annual organic LO growth, plus another ~10% from acquisitions. Get it right & the company could double in three to five years. Atlantic Bay is also retaining servicing, though the portfolio naturally ebbs & flows.

Her actual frustration isn't losing Mullinix — "pleasure to work w/ Will. Sometimes people boomerang back" — it's anonymity.

"One of my big things is we won't be a secret,” she told me last week. “People tell me we are the best kept secret & that's not what I want."

If Atlantic Bay’s pitch is nimble independent lender, Primis Mortgage has a different structural advantage: It operates like an IMB but has a bank’s balance sheet behind it.

“Since I sold to Primis Bank & run the company, we have something pretty special operating like an IMB — I’ve done it for 25 years — but the muscle of the bank,” Owens told me.

That creates a couple advantages right away. B/c Primis sits inside a bank, it can operate nationwide under the bank licensing exemption (everywhere except New York). And it doesn’t need warehouse lines.

In terms of model, it’s retail only, no P&L.

Owens is mainly interested in lenders doing $1B or less, though he said he’d flex for the right deal. His filter is culture first, geography second. Ops employees generally stay, subject to whatever right-sizing is required. And Primis already has some organic momentum: the mortgage unit closed $421M in Q2 ‘26, up 30% YoY, producing $11.4M in mortgage-related income & roughly $2.2M in pretax earnings.

Owens expects the business to do about $2B this year. He says volume has grown roughly 40% annually since the sale to Primis Bank & projects the company could hit $3B organically next year.

What he doesn’t plan to do is join the LO recruiting arms race.

“We don’t have anyone on a contract so throwing 100bps at someone is not us,” Owens said. “We have seen those scenarios backfire way too often. If someone is paying that kind of money upfront, they’re of course going to get a return on that.”

His bet is that buying the right organization can produce stickier growth than “renting” a star producer for three years. And he thinks the pressure pushing smaller shops toward the negotiating table is only going to increase.

“I feel smaller lenders will have a tough time in the upcoming market due to warehouse constraints, compliance risks & margin compression.”

By Karen Postiglioni

I listened to Vishal Garg on the “No Surrender” podcast late last week, & it got me thinking about something bigger than Better.

There’s such an asymmetry in how we evaluate experience. For most jobs, we’re incredibly literal.

And AI is making this even worse! In a lot of hiring, we’re using technology to scan résumés, match keywords & rank candidates against increasingly specific job requirements. So instead of questioning whether those requirements are actually the right proxy for ability, we may just be automating the same narrow thinking faster.

Then somehow we get to the very top of an organization & the rules get considerably looser. The bigger the job, the more risk companies seem to be willing to take.

Vishal built Better. He deserves real credit. He also had more than a decade to build it & several years post-COVID to adapt the model. At this point, shareholders have an actual track record to evaluate.

Daniel Lewis has significant investing, governance & operating experience.

But nothing on his résumé obviously says: “This is the person who has already demonstrated the ability to lead a mortgage manufacturer, monetize an AI platform, build enterprise distribution and navigate the economics and regulation of this industry.”

I’m not advocating for either one. And technically, they aren’t the only choices. Daniel is interim, & Better says it is conducting a permanent CEO search. Garg has also said he would hire a professional manager as CEO. Good! Because somewhere there is probably an executive who has already solved many of the problems Better needs to solve next, just on a smaller scale.

At almost every other level, we penalize that person for not having already held the exact job. At the top, boards sometimes get remarkably comfortable w/ adjacent credentials, investor credibility, boardroom experience or relationships. Sometimes it feels perilously close to: 'Yeah, I know that guy.' That’s backwards. Nobody has solved the future yet.

But instead of asking: 'Have you had this title before?'

Maybe we should ask: 'What have you actually solved?' 'What did you build?' 'What did you change?' 'How quickly did you recognize when something wasn’t working?'

And the most basic one: 'Did the economics eventually work?'

Because pedigree is not performance. And familiarity is not proof.

A market veteran who in February predicted that benchmark U.S. Treasury yields would hit 5% says the selloff isn’t done yet. Steven Barrow, head of G10 strategy at Standard Bank in London, raised his estimates for 10-year Treasury yields to 5.2% by year-end & expects them to hit 5.3% in the first quarter of ‘27, Bloomberg reported. 

The 10-year rate traded as high as 5.01% on Monday (the highest it’s been since ‘07), but is down to 4.97% as of this writing. Market traders say the Fed is going to hike the benchmark rate this week, which sounds like a no-win situation for Kevin Warsh.

(🙏 If you like what you’re reading, tell a fellow mortgage junkie to sign up here.)