Breaking: GO Mortgage and PacRes Mortgage Announce Merger
Pictured: Michael Isaacs, CEO of GO Mortgage, Melissa Stashin, President of PacRes, and Matt Stashin, CEO of PacRes, who announced the merger of the two companies.
Ohio-based GO Mortgage and Oregon-based Pacific Residential (PacRes) Mortgage have announced a merger, expected to close in the third quarter of 2024.
For the foreseeable future after the merger, the two companies will continue to operate under their respective names, according to a source familiar with the situation.
"By uniting our unique capabilities and resources, we will achieve significant operational improvements and foster innovation," said Michael Isaacs, CEO of GO Mortgage, in a press release.
The move is meant to drive down the cost of originating a loan while giving the new company a competitive advantage, said the CEO and founder of PacRes, Matt Stashin.
Isaacs will be the CEO of the combined company while Matt Stashin will join the GO Mortgage Board of Directors. Melissa Stashin, President and Founder of PacRes, will become President of GO.
"This merger represents two culturally-aligned and highly complementary brands joining forces to serve our clients and employee-partners better,” said Melissa Stashin in the press release.
The companies are in fact well-aligned. They are similar in size, according to Home Mortgage Disclosure Act (HMDA) data obtained through Polygon Research HMDAVision. In 2023, PacRes originated 1,681 loans worth $615 million. GO originated 2,200 loans for a nearly identical dollar amount: $619 million. PacRes has 20 branches according to its website, while GO operates 24 branches.
But the similarity doesn’t end in loan and branch count. HMDA shows that both companies are focused on home purchase business. Around 90% of GO and PacRes loan volume in 2023 consisted of purchase transactions.
The companies are, however, diverse in their geographic coverage, which will help expand their footprint after the merger. PacRes originated around 65% of its loan volume in Oregon, California, and Arizona in 2023 while GO originated about half its volume in Ohio, Wisconsin, Pennsylvania, and Florida, with just a handful of loans originated on the West Coast.
The merger comes at a time when operational efficiency, one of the goals of the merger, is more important than ever. HousingWire reports that independent mortgage banks (IMBs) – a designation to which GO and PacRes belong – lost an average $2,109 per loan originated in Q4 2023 and $645 per loan in Q1 2024. These numbers don’t reflect the companies specifically, but point to the tough environment facing lenders.
Mortgage rates are near 22-year highs according to Freddie Mac. As if that weren’t enough, the number of homes for sale as of April 2024 was about two-thirds that of April 2019. Lack of inventory means many of those who can qualify for a mortgage can’t find a home to buy.
Current mortgage rates are making it tough for just about every company to generate refinance or purchase business.
Despite industry challenges, leadership at the new GO/PacRes entity is optimistic.
"Together, we look forward to building on the strong foundation of GO Mortgage and PacRes Mortgage to create a truly remarkable mortgage lender that will continue to create significant value for our customers, partners, and employees," said Isaacs.
Other moves inside the companies include Eric Wiley, the current Executive Vice President/Founder of PacRes Mortgage, who will become Chief Experience Officer. Andrew Panagos of GO Mortgage will become the Chief Operating Officer. David Swecker, currently COO AT PacRes, will be leading as CFO.
