A new deal between Oceanfirst Bank and Embrace Home Loans has led to the latter expanding its presence in the Mid Atlantic region, a model that could provide a roadmap for other companies, it said.      

Following the New Jersey-based bank's decision to terminate in-house mortgage lending last year, the two companies agreed to a strategic partnership whereby Embrace would work with interested Oceanfirst referrals for new originations. Thus far, the strategy appears to be paying dividends, ensuring Oceanfirst clients receive access to residential home financing, according to leadership at both companies.  

"Since the launch of the partnership with Oceanfirst, we've already seen strong early engagement from customers and Oceanfirst teams alike, reinforcing the value of pairing trusted local relationships with dedicated residential lending expertise," said Embrace's founder and CEO Dennis Hardiman. 

Since initiating the agreement, the Middletown, Rhode Island-based independent mortgage bank has made investments in growing its Garden State presence with the addition of new locations and investments in local processing and underwriting staff, including the hiring of former Oceanfirst employees. 

At the time of the announcement, Oceanfirst notified New Jersey officials it would eliminate over 100 mortgage-related positions with the move, ending the bank's presence in home lending that date back to the early 1900s.  

"They have the scale and expertise to support our customers seamlessly," said Oceanfirst's president of consumer lending Stephen Adamo, who previously served as an executive at Embrace Home Loans.

"By investing in local loan officers, operations and support teams, we're ensuring customers receive a consistent, high-quality mortgage experience from people who know their markets," Hardiman added.

Along with increasing Embrace's headcount, the two companies also embarked on joint initiatives, including marketing, outreach both within Oceanfirst branches and online as well as the development of local resources to serve homeowners in the Mid Atlantic.   

A roadmap for future mortgage partnerships?

The Embrace-Oceanfirst agreement could serve as a model for nonbanks to grow "as banks increasingly look to specialized partners to support home lending needs," the lender noted. 

Oceanfirst is one of several depository institutions to exit home lending in recent years, with 2025 also seeing similar announcements from the likes of Wafd, Popular Bank and Ally Financial. Banks have cited regulatory burdens and the challenges of achieving profitability in a business with high operating costs behind their decisions. 

At the same time, some banks are choosing to increase investments in mortgage, often seeing opportunities in specific local markets.  

Future partnerships could involve businesses elsewhere in financial services outside traditional banks. The fourth quarter also brought with it a new agreement struck between digital investing platform Robinhood and Sage Home Loans following a successful pilot program.  

Growth potential in the region's housing market

Embrace's growth in the greater Mid Atlantic coincides with recent research showing property values in the regional housing market continuing to rise throughout the past year while other parts of the country flatline or post decreases — an indication of resilient housing demand. Year-over-year growth in the Mid Atlantic came in at 5.3% in October, well outpacing the national 1.7% average, according to the Federal Housing Finance Agency. 

At the same time, some Mid Atlantic states, such as Maryland and New York, rank near the top in the Mortgage Bankers Association's affordability index measuring payments for new originations relative to income.