LoansDirect Sold to E*Trade
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E*Trade Group Thursday released plans to acquire LoansDirect and add mortgage origination to its online investing service platform.
The transaction will be structured as a purchase with E*Trade stock. Complete financial details were not disclosed.
The acquisition lays groundwork for E*Trade to strengthen its offerings and provide strategic inroads into the consumer lending market, according to Christos M. Cotsakos, chairman and CEO of E*Trade Group.
"An integrated mortgage origination platform will enhance the growth of our portfolio by providing a strong and consistent asset stream," he said." The acquisition will also increase yields, resulting in substantial revenue and net gain income, and diversify our revenue stream through the such additional channels as origination points, loan-related fees and gain on sale revenue."
LoanDirect's mission is to provide the lowest possible rates and fees to the consumer while making the process fast and easy, according to Mitchell H. Caplan, chief banking officer of the E*Trade Group.
"By leveraging E*Trade's brand name and financial resources with LoansDirect, we intend to achieve fast time to market, cost-efficiencies and a pricing advantage over the competition," he said. "We will also use the LoansDirect model as a springboard to enter the consumer credit market."
LoanDirect's lending products include first, second and third mortgages; primary residences and vacation homes; home improvement; debt consolidation; and first-time homebuyer programs.
This is the E*Trade's third acquisition in as many months. In November, the financial entity announced the purchase CA$HWAVE's ATM contract portfolio, providing it with an increased presence in the Southwestern United States, and completed its acquisition of privately-held PrivateAccounts.com, a developer of online separately managed accounts.
The company's goal is to further penetrate the mainstream banking market, according to Cotsakos.
It is unknown whether layoffs will take place or services will be altered as a result of the acquisition. Calls to E*Trade were not returned as of press time.
The company's stock
opened Thursday at 9 13/16 and,
as of 10:45 a.m. EST, was trading at 10 3/32.