Prior to last week, it was rare to hear any criticism of Jim Coffrini. He is a legend in mortgage banking, founding Sierra Pacific Mortgage in 1986 & building an enduring business. Many workers knew Coffrini personally. He was one of The Good Guys™️ at the top of the mortgage heap—supportive, encouraging, available.

So it was shocking for the ops & back-office staffers who learned they would be laid off w/o severance following a 5-minute “all hands” call w/ Coffrini, in which he said assets of the business had been sold to his friend Bill Cosgrove of Union Home Mortgage. Coffrini took no questions on the call, said it was a good fit for Sierra Pacific staff & that he was looking forward to spending more time w/ his grandkids.

"I'm still in shock how he handled it," a 15-year loyalist told NFM’s Greg Sher, who’s used his large LinkedIn following to shame Coffrini into doing more for employees not offered jobs. "We were a family. During COVID, many of us worked from 4AM-7PM to keep the company alive - we were that close."

Coffrini completed the asset sale to UHM in late September (price undisclosed), but kept hold of Sierra Pacific’s $6.3B servicing book, which is worth an estimated $70M. Not a bad retirement plan.

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Coffrini has perhaps taken the public criticism to heart 🫀. On Friday, Sierra Pacific quietly offered at least one grumbling staff member 2 weeks of severance, The Scoop has learned. But in text exchanges reviewed by The Scoop, other veteran employees who haven’t been vocal said they’ve been offered nothing.

“Paying severance is standard," said one M&A consultant. "SPM not paying was ridiculous...It's not like he doesn't have money, which has been the case for many others."

However, a different M&A consultant said it’s not unusual in asset sales for back-office staff at small lenders to get bupkis when they fold, though he said often those staffers have to stick around as part of the transition, which is a de-facto severance.

“If people want severance, unfortunately they need to work for a ‘corporate’ company,” he said.

One Sierra Pacific source defended Coffrini. The source said the UHM closing happened so fast that Coffrini probably hadn’t yet figured out the transition for everyone. Most of those not joining UHM were still working or had already found new jobs, the source added.

“The messaging was poor. They rushed this thing to the finish line—40 years of Jim’s life came down to this phone call. Jim's problem was he announced a 40 year divorce & he broke down on the phone call. It's not a pleasant thing for anybody."

Regardless, the handling of the sale to UHM has spurred larger questions about ownership’s responsibility to staffers in a sale. Coffrini took the risk to build the company over 40 years & deserves his reward. But he didn’t do it alone. What should employees expect from their leaders when decision day comes?

Share your thoughts w/ me at [email protected].

Kevin Ryan is the latest member of the finance team to depart Better. Ryan announced on Friday that he had joined Pennymac as chief strategy officer. You might recall that less than 2 months ago, while still working at Better, he had also joined top M&A law firm Houlihan Lokey 👀 in a capital markets role. Pretty unusual.

“My money is on an acquisition,” speculated one mortgage exec. “Pennymac needs an origination channel, this would be a smart move by them.”

The tech stack is highly complementary too, the exec said. Better’s Tinman is an incredible POS but not much of an LOS, & Pennymac has a large stake in Vesta, arguably the most advanced LOS in the space. Though Better loses $3,000 a loan, its fulfillment is about $1,200 a loan, said a source familiar w/ its operations.

Add Pennymac’s top-tier leadership team, correspondent prowess & a servicing book & that company would be a “money making machine,” the exec said.

Any acquisition of Better would be complicated. The digital lender has a lot of debt & quite a bit of legacy baggage. Pennymac did not immediately return a request for comment.

Since 2018, NEXA has been one of the loudest voices stirring the "Brokers Are Better" rhetoric, gleefully telling people that retail just wasn't up to snuff. Turns out telling people they suck makes it hard to recruit them. Who knew?! 🤔

That’s right, the man who humbly declared himself the “greatest 🐐 mortgage broker of all time,” just 2 months ago isn’t really into the whole broker label. More than 1/2 of NEXA’s business is non-del correspondent & they actually think of themselves as a wholesale company, Mike Kortas said.

The NEXA of 2025 is rebranding to NEXA Lending & Kortas told NMP that he no longer wants to fight 🥊.

“I believe brokering is better, but I want to rename it to wholesale. And wholesale is brokering, if you will,” he said. “The rhetoric of ‘brokers are better’ no longer serves the broker community. It caused a lot of risks. It caused a lot of turmoil within the industry. So what changes is let’s grow up. Let’s stop fighting each other.”

As for why NEXA is embracing the non-del correspondent model, check out our feature from last month.

UWM has convinced a federal judge to dismiss most of a proposed consumer class action that accused the wholesale lender of conspiring w/ brokers to push buyers into expensive mortgages, while pocketing billions of dollars in excess fees.

But there’s a reason Mat Ishbia isn’t quite celebrating just yet, writes industry attorney Brian Levy. Despite “all that winning, however, the UWM Decision drops a RESPA bomb on UWM & mortgage brokering generally considering the ubiquity of wholesale lender perks to their brokers.” Levy notes that the court found the plaintiffs had sufficiently made a RESPA claim —> that UWM gave brokers “a thing of value” when they offered them the opportunity to participate in their marketing programs, which included receiving marketing materials & attending lavish trips.

“And as Plaintiffs aptly point out, the second pleading requirement—agreement or understanding—is met by showing a “thing of value is received repeatedly and is connected in any way w/ the volume or value of the business referred,” Levy wrote.

Still, there are indications the judge will still side w/ UWM in the end. Levy pointed to a footnote in which the judge states that the amended complaint is void of any breach of contract or RESPA claims against the broker, which is the person who was allegedly paid for services not rendered. “While the UWM Decision’s footnote is a bit ominous for the mortgage brokers involved, given UWM’s priors, it seems highly unlikely that UWM will throw its brokers under the RESPA bus,” he wrote.

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