As the Federal Reserve continues to raise interest rates to drive down inflation, the real estate sector is searching for other ways to generate revenue. USA Mortgage looks to benefit from the nationwide trend.
Its Creve Coeur-based team has created a separate entity, DAS Partnerships, to form joint ventures with real estate companies, builders and “anyone who wants to start a mortgage company,” said Ron Mueller, Executive Vice President of USA Mortgage.
USA Mortgage has been working to pursue this business model for several years and “with the market retracting, what you’re seeing is a lot of real estate companies and builders starting their own mortgage companies and their own title companies because they’re looking for ancillary revenue,” Mueller said as the timing aligned to start DAS Partnerships.
Mueller said USA Mortgage is structuring its first joint venture now, with details to be announced soon. The long-term goal is to have roughly 50 joint ventures and for the joint venture arm to generate about $1 billion a year in loan volume within two to three years, Mueller said. The plan calls for USA Mortgage to create new brokerages with partners that would have their own name, branding, and employees. “They would broker loans. Some of those loans would go back through our wholesale channel, which is DAS Wholesale, and then some of those would go to other brokerages. We co-manage it together in a partnership,” Mueller said.
As the St. Louis area’s largest mortgage lender looks to expand, USA Mortgage hired Nic Stotler, the former CEO of Dielmann Sotheby’s International Realty, to lead the joint venture arm. Mueller said Stotler has the “real estate mind” that USA Mortgage wanted and is looking forward to the partnerships that he will foster.
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