Magazine article American Banker

GMAC Executive Sees Niche Lenders Gaining Upper Hand

Magazine article American Banker

GMAC Executive Sees Niche Lenders Gaining Upper Hand

Article excerpt

The days of mortgage lenders acquiring other firms to build size and scale are over, according to Danny Hellams, GMAC Residential Funding Corp.'s new managing director of client relations.

Instead, an evolving borrower base will increasingly favor niche lenders, Mr. Hellams, the former president of Bank of America Mortgage, said in an interview last week.

"Over the next 10 years, with the increasing number of immigrants desiring homes, there is an incredibly solid place to play for those organizations that respect those clients from a standpoint of operating ethically and honestly and providing risk-based solutions," he said.

Acquisitions will no longer be driven by scale, according to Mr. Hellams. The reasons: Recent purchases have enabled firms to develop national strategies, it is expensive to acquire large companies, and it is difficult to integrate merged companies.

Instead, firms will make deals designed to improve productivity, such as the acquisition of a technological partner, he said. "Many companies are looking for, How do I diversify delivering other products and creating other products? How do I utilize technology more smartly? Whom can I partner with who can provide me with those solutions?"

Mr. Hellams left Bank of America in May after 30 years with the Charlotte banking company and its predecessors. He said he had "accomplished all of the things that B of A wanted me to complete and accomplish," but had no intention of retiring. …

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