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Arizona-based lender On Q Financial<\/strong> will form a multi-partner mortgage banking joint venture with HomeCo Partners<\/strong>, a consortium of real estate brokerages and a builder, HousingWire <\/strong>has learned. HomeCo Partners had created a JV with New Rez<\/strong>, which is permanently winding down. <\/p>\n The JV, named Partners United Mortgage<\/strong>, <\/strong>has partners consisting of real estate brokerages <\/a>and builders \u2014 including Dilbeck Real Estate<\/strong> in Pasadena, California; Lisa Burridge and Associate<\/strong>s in Casper, Wyoming; Rockford Homes<\/strong> in Columbus, Ohio; Weichert ABG<\/strong> in Louisville, Kentucky; Weichert Space Place <\/strong>Huntsville, Alabama; Stark Real Estate <\/strong>in Madison Wisconsin; Weichert Advantage Plus<\/strong> in Knoxville, Tennessee; and Weichert Griffin<\/strong> in Fayetteville, Arkansas.<\/p>\n On Q Financial was originally looking to buy New Rez\u2019s share of a joint venture created with HomeCo Partners, Pat Lamb, CEO of On Q Financial, said in an interview. After the deal fell through due to regulatory filings, HomeCo Partners suggested forming a new JV with On Q Financial.<\/p>\n \u201cThis JV actually, because it’s a consortium, allows real estate firms and home builders that don’t quite have enough size to go the full joint venture route to still get into the mortgage<\/a> side of the business by becoming one of the partners in the JV,\u201d Lamb said.<\/p>\n Unlike a traditional JV model, the consortium model doesn\u2019t require real estate brokerages or builders to make a large upfront investment to start. It also gives the JV a geographical and business model dispersion.\u00a0<\/p>\n \u201cIf one of our partner’s business slows down for a year, it doesn’t affect the seven other partners, and it doesn’t affect the overall performance of Partners United the same way it would if there was only one partner,\u201d Bob Shield, president of Partners United Mortgage, explained.\u00a0<\/p>\n On Q Financial is looking to benefit from servicing its referral partners throughout their lifecycle. The retail channel \u2013 which accounts for 85% of the lender\u2019s entire business \u2013 is On Q Financial\u2019s bread and butter, and the remaining 15% of production<\/a> comes from the correspondent and wholesale channel, Lamb noted.<\/p>\n \u201cWe are constantly out building relationships with our referral partners, and doing it from initial introduction, where you’re doing a single transaction to try and to grow those relationships to become a preferred lender. Having the ability to do a consortium joint venture like this gives us the ability to grow with our clients,\u201d Lamb said.<\/p>\n About 25 loan officers are expected to join the multi-partner JV with Partners United Mortgage, paying for On Q Financial\u2019s backroom, HR and financial support.<\/p>\n \u201cWhen the company makes money, they (the eight partners of HomeCo) split based on their percentage of ownership, not their contribution to the business. Maintaining strong compliance is important for On Q, and properly structuring ownership and distributions is critical from a Real Estate Settlement Procedures Act (RESPA) perspective,\u201d Shield noted.<\/p>\n Most recently, On Q Financial brought on former employees from Celebrity Home Loans<\/strong>.<\/p>\n A deal to acquire eight production divisions of Celebrity fell apart<\/a> due to a mass layoff<\/a> at Celebrity in February. Afterward, On Q Financial brought over about 20% of what Celebrity was producing after several of Celebrity\u2019s retail businesses transitioned to Luminate Home Loans in December and January, Lamb said.<\/p>\n On Q Financial, which originated $2 billion last year in 46 states, is in acquisitive mode, Lamb added. <\/p>\n “We’re actively looking and in the market to acquire other companies that are deciding that maybe it’s time to leave the business or consolidate,” he said.<\/p>\n