Fidelity Mortgage bought out
Longtime Grand Junction mortgage lending company Fidelity Mortgage has been bought by Roswell, N.M.-based PSM Holdings Inc., an acquisition Fidelity principals say will allow the company to expand the type of loans it offers and hire more employees.
The deal, officially completed Monday and announced Wednesday, merges Fidelity into United Community Mortgage Corp., a Keyport, N.J.-based subsidiary of PSM Holdings. Fidelity will retain its name and all of its employees, and the Grand Junction office at 700 Belford Ave. will serve as the regional corporate office and lending center for PrimeSource Mortgage, covering Colorado, Idaho, Montana, North Dakota, South Dakota, Utah and Wyoming.
“It expands our base,” said Fidelity Chief Executive Officer James Pulsipher, who becomes PrimeSource Mortgage’s mountain region vice president. “They came to us based on our success in the community and want us to run operations here for their seven-state mountain region.”
Ron Hanna, chief executive officer of PSM Holdings, couldn’t be reached for comment Wednesday, but in a statement he said the purchase of Fidelity “represents one more step in our goal of becoming one of the premier mortgage banking companies in the U.S.”
As part of the acquisition, Pulsipher and Fidelity Operations Manager Jared Peterson received nearly 1.8 million shares of PSM Holdings stock. Pulsipher, who estimated the stock is worth $1.5 million, will sit on the board of directors of United Community Mortgage Corp. Peterson becomes the regional operations manager of PrimeSource Mortgage.
PSM Holdings also signed a letter of intent to purchase FMC Properties LLC, the holding company that owns the Fidelity Mortgage building.
Pulsipher said Fidelity Mortgage and PSM Holdings had been negotiating the acquisition for the last six to eight months, and the two companies have had dealings in the mortgage industry for years.
The acquisition and subsequent expansion of Fidelity comes at a time when other mortgage lenders have scaled back their presence in Grand Junction. Bank of America Corp. and Wells Fargo shuttered their mortgage-application-processing centers in Grand Junction in April and May, respectively.
Pulsipher said Fidelity, which employs 18 workers, expects to double that number in the next 12 to 18 months. Because PSM Holdings is a publicly traded company, Fidelity employees now have the option of owning stock in the company.
The acquisition gives Fidelity access to an expanded platform of loans. One product Pulsipher said he’s particularly excited about is a new residential construction program that will allow borrowers to build a new home with just a 3.5 percent down payment. Normally, someone has to put down cash totaling 20 percent.
“Construction lending guidelines have really constricted,” Pulsipher said. “Banks have been resistant to loan. This was a big niche we saw.”
Pulsipher said Fidelity, which has operated in Grand Junction since 1986, has seen a dropoff in the number of mortgages it processes in the last few years, as the Grand Valley housing market fell with the economy. But he claimed Fidelity handles more purchase money mortgages than any other lender in Mesa County, accounting for 30 percent of the market.
PSM Holdings is licensed in 21 states and operates more than 30 mortgage-lending branches. In a letter to stakeholders posted on the company’s website this week, Hanna wrote that PSM Holdings is in the first phase of a growth strategy in which the company acquired three mortgage banking companies since March and plans to purchase another four or five by this fall.
“On behalf of our entire management team and organization, I would like to take this opportunity to thank you for your continued interest and support,” Hanna wrote in concluding his letter. “Although it has taken many years, I believe the end goal is in sight. I, along with the entire management team, will continue to ardently serve you in our ongoing efforts to generate the highest shareholder value.”