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Steve Schulz of Lenders One on the M&A Environment

By MBA Insights Staff
February 18, 2019

Steve Schulz
Lenders One

Steve Schulz is National Programs and Product Strategy Leader with Lenders One, St. Louis. He directs the overall solutions strategy and preferred provider relationships, managing a portfolio of more than 45 products and services. He led the launch of four new Lenders One-managed services in 2018, including the L1 M&A Connector. A financial services industry veteran, he held leadership roles in product management, solutions marketing, strategy and communications with Equifax and The First American Corp., prior to joining Lenders One.

MBA INSIGHTS: 2018 saw some fairly large acquisitions in the mortgage industry--Mr. Cooper's acquisition of Pacific Union; Ocwen's acquisition of PHH and Zillow's acquisition of Mortgage Lenders of America to name a few. What do you see in store for 2019?

STEVE SCHULZ, LENDERS ONE: At Lenders One, our focus is primarily on midsized independent mortgage bankers, and in that segment we anticipate continued consolidation as the market contracts. However, consolidation doesn't always come in the form of companies buying and selling; we are seeing some innovative partnership models emerging between originators to take advantage of shared production platforms, new technology and economies of scale. Ultimately we do expect to see more acquisitions in 2019, but collaborative models are likewise on the rise.

INSIGHTS: What is one of the biggest misconceptions about M&A?

SCHULZ: That it's a standalone event--a transaction between two parties. M&A should be a sub-segment of a broader corporate strategy, contemplating inorganic growth levers or, in the case of the company acquired, a planned exit from a business segment. We advise the members of our cooperative to frame their M&A decisions in that broader context, which results in more purposeful and planned action.

INSIGHTS: Why should independent mortgage bankers be thinking about M&A--either as an acquirer or an acquiree?

SCHULZ: In speaking with dozens of independent mortgage bankers who are actively seeking to acquire, the top two attributes they're looking for are cultural fit and solid technology infrastructure. Technology plays such an important role in mortgage production today and it's directly or indirectly factored into a company's valuation. However, people compatibility--which drives the likelihood of successful business integration post-acquisition--remains at the top of the list. We think acquirers should perform focused due diligence in those areas, and acquirees should expect to be measured on their strength in those areas.

INSIGHTS: Is there a "best time" to begin a discussion about M&A?

SCHULZ: If a company is committed to a long-term strategic plan, then their M&A roadmap is largely in place already; market factors can influence timing, but internally M&A targeting should be an ongoing discussion for a lender's executive team.

INSIGHTS: Lenders One recently launched an M&A Connector. What is it and how does it work?

SCHULZ: Lenders One is in a unique position to regularly discuss growth plans with our member companies, and as we're seeing potential buyers and sellers emerging in this market cycle, we saw a service opportunity in setting up a confidential matching service. At no cost to Lenders One members, we discretely collect information from prospective buyers and sellers and build profiles. We then looking for matching attributes and, with the consent of both parties and under non-disclosure protection, facilitate a dialogue between the principals from the matched companies. At that point we exit and the companies determine whether to move forward; in the event that they do, we also offer referrals to preferred providers on the Lenders One network that can serve as advisors (attorneys, accountants, consultants) to the transaction.

INSIGHTS: How does the M&A Connector assess and evaluate risk?

SCHULZ: The L1 M&A Connector stops at the point of intelligent pairing of potential buyers and sellers. We leverage our role at the center of hundreds of industry relationships to help foster those connections. Beyond that, we advise our members to consult true M&A advisory firms for valuation, risk assessment, due diligence and so on.

INSIGHTS: Why is due diligence so important?

SCHULZ: Acquisitions impact lives and livelihoods. When well-planned and well-executed they can deliver tremendous value for both organizations involved, but when improperly pursued or executed, they can tear apart otherwise solid organizations. Extensive due diligence--fully understanding not just the value of the asset but all of the dynamics between two companies being folded together--is the best means by which the principals on both sides can protect the interests of their most important asset, their people, in the transaction.

(Views expressed in this article do not necessarily reflect policy of the Mortgage Bankers Association, nor do they connote an MBA endorsement of a specific company, product or service. MBA Insights welcomes your submissions. Inquiries can be sent to Mike Sorohan, editor, at; or Michael Tucker, editorial manager, at

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