Toronto-based Bank of Nova Scotia, which operates as Scotiabank, has hired a group of JPMorgan Chase Bank executives to lead a new mortgage capital markets business that expects to launch this fall.
Industry veteran Thanh Roettele, who spent more than 28 years at JPMorgan and was the managing director of its mortgage warehouse finance business, is transitioning to Scotiabank. He will lead the new business as a managing director alongside Brice Simpson and Francis Lim.
A spokesperson for Scotiabank did not immediately reply to HousingWire‘s request for comment. Inside Mortgage Finance (IMF) and Bloomberg first reported on the topic.
A JPMorgan representative said that Chris Bono will step in to lead the bank’s mortgage finance sector under its global corporate banking business. The spokesperson added that Bono “has been at the firm for more than two decades, with long experience serving financial institutions clients, including those in the mortgage space.”
JPMorgan was the largest mortgage warehouse lender in the U.S. in the first quarter of 2024 with a 21% market share, according to IMF. The bank was followed by Flagstar Bancorp (11.5% share), Merchants Bank (7% share) and Everbank (6% share).
Flagstar, however, exited the mortgage warehouse lending space in May. Its parent company, New York Community Bancorp, sold approximately $5 billion in warehouse mortgages to JP Morgan to improve its capital and liquidity position.
Loans through warehouse lenders, a source of liquidity to independent mortgage banks (IMBs), tend to have strong yields, short terms, and are highly secured and collateralized.
But they are not immune to systemic industry shocks, including last year’s bank crisis. Following the tumult, warehouse lenders like Dallas-based Comerica Bank chose to exit the business.
Regarding Scotiabank, a total of seven executives from JPMorgan in Texas are joining the bank, which has structured its U.S. finance business, according to a memo reviewed by Bloomberg.
On Monday, the bank announced a strategic minority investment of $2.8 billion in Cleveland-based KeyCorp. The investment represents a 14.9% pro forma common stock ownership at a fixed price of $17.17 per share.
