Mortgage lender confirms expansion to West Palm Beach, will bring 600 jobs; company's average salary is over $90K
Mortgage lender NewDay USA on Tuesday confirmed plans to create a headquarters in West Palm Beach, bringing 600 new jobs in one of the largest corporate deals to land in Palm Beach County in years.
The company's identity was revealed by the Palm Beach Post last month. The Fulton, Md., company is taking 50,000 square feet at 360 Rosemary, a 20-story, 300,000-square foot tower being built next to Rosemary Square by Related Cos. of New York.
The NewDay USA location is a second headquarters for the mortgage lender, which originates refinance mortgage loans guaranteed by the Veterans Administration. The company is expected to maintain its Fulton, Md., offices.
Business leaders hailed the move as a boost for employment, especially for young adults. The average salary of a NewDay employee is more than $90,000 and the average age is between 25 and 30.
NewDay's business history, however, is not without incident.
In recent years, the company has tangled with national and state regulators of mortgage loans, on issues ranging from cheating to loan churning.The company surrendered its license in New York state in 2015 after it ran afoul of regulators for cheating on exams.
The Business Development Board of Palm Beach County, the county's business recruitment arm, for years has been seeking to grow the county's financial services industry, said Kelly Smallridge, BDB president.
Many firms have set up offices in West Palm Beach, Palm Beach Gardens and Boca Raton, but often the offices are small and only employ a handful of people.
But the NewDay USA deal is the largest by far, both in the number of new jobs it will create, and also the size of its office space in West Palm Beach, according to Smallridge.
"It's transformational," Smallridge said. "We are proud to welcome them as our newest corporate citizen."
Rob Posner, chief executive of NewDay USA, said in a statement that the area was attractive because of its large population of veterans.
"South Florida hosts a growing and educated workforce and the state represents the third-largest veteran population in the U.S., making West Palm Beach the ideal choice for our company’s second headquarters," Posner said.
"NewDay USA proudly helps veterans and their families achieve greater financial security, and we are excited to establish a new home in West Palm Beach to carry out our mission," Posner said.
The West Palm Beach Community Redevelopment Agency recently approved $1.8 million for the training of new hires at NewDay University.
In a statement, West Palm Beach Mayor Keith James said the city looks forward to "NewDay USA’s valuable work and positive economic impact on our community."
In recent years, NewDay's business practices have netted the company heightened scrutiny, and sometimes action, from federal and state regulators of mortgage loans.
In 2015, New Day Financial, which does business as NewDay USA, was ordered to pay a $1 million penalty to the New York Department of Financial Services. The company elected to surrender its mortgage banker’s license to do business in the state.
This action came after NewDay USA employees, including senior executives, engaged in a scheme to cheat on state-required continuing education courses and exams, Housingwire.com reported.
According to Housingwire.com, state financial regulators said the cheating scheme extended to Posner, who had continuing education requirements completed on his behalf by other employees on at least 18 occasions.
Earlier that year, the Multi-State Mortgage Committee, a group that coordinates state systems of mortgage regulation, announced a settlement involving 43 state mortgage regulators and NewDay.
As part of the settlement, NewDay was fined $5.3 million for cheating on testing. At the time, NewDay said the issues were discovered from self-reported violations, all of which were resolved.
In 2018, NewDay and another Department of Veterans affairs lender also were temporarily restricted from participating in a Ginnie Mae mortgage-backed securitization program due to loan churning, which is a form of refinancing in which the borrower appears to benefit but does not. Although an interest rate might be lower, the fees attached to the deal can increase the overall loan amount, meaning it could take years for a homeowner to reap any benefit from a refinance.
Housingwire.com reported that the move was part of the federal agency’s effort to control a rise in mortgage lenders that were aggressively targeting service members and military veterans for quick and potentially risky mortgage refinances.
The restriction on NewDay was lifted in 2019 after the agency found improved performance, Housingwire.com reported.
Smallridge said the company was upfront to the BDB and the city about its prior history, issues thatSmallridge said NewDay told her had been addressed.
"NewDay USA takes its compliance efforts very seriously. These regulatory actions are long in the past and have since expired," a NewDay USA spokesperson said on Tuesday.
Smallridge said the Maryland company began scouting for office space in a warmer climate early last year, when the coronavirus pandemic first hit.
Like many financial executives, NewDay's chief executive decided to buy a home on Palm Beach, too. Last July, Posner paid $19.8 million for a home at 230 N. Ocean Boulevard, according to Palm Beach County property records.
Because NewDay hires young workers, it needed the help of universities to create a workforce, Smallridge said. Key to the deal were efforts by Florida Atlantic University and Lynn University to convince NewDay officials there were plenty of graduating students available for hire.
"Attracting a workforce was one of their biggest issues," Smallridge said. "This (company) provides a big opportunity for young graduates to make a very good wage," Smallridge said.
Smallridge said she expects NewDay employees will live downtown, within walking distance of the 360 Rosemary office tower. Their presence not only will fill up new apartments open or under construction, they also will be spending money in area businesses, including restaurants.
County and city leaders said NewDay's presence will further diversify the city's economy and add heft to efforts to create a financial services hub in West Palm Beach.
But unlike other financial services firms opening small offices, NewDay is creating a second headquarters in Palm Beach County.
Smallridge said NewDay isn't the only company contemplating the same move.
"Many of the financial service firms that we've spoken to have expressed an interest to make this a second headquarters, to ease the transition to this becoming a primary headquarters," she said. "I have no indications this is the case with NewDay, but I have had conversations with other executives (at other companies) about it."
In addition to NewDay, real estate sources say tenants coming to 360 Rosemary include Paul Singer's Elliot Management, which is leasing 25,000 square feet with an option for another 15,000 square feet and Point72, a Connecticut-based fund owned by Steve Cohen that is leasing 4,000 square feet, with another 7,000 square feet in expansion space available.
Elliott Management Corp. also is subleasing 7,600 square feet of space belonging to the Arnold and Porter law firm at Phillips Point until its space at 360 Rosemary is ready.
In addition, Comvest Partners will move to 26,000 square feet at 360 Rosemary from CityPlace Tower. Rosemary Square is set to welcome tenants starting in the second quarter.
Goldman Sachs also is circling the market, looking for larger space than the small, existing office it now has at Phillips Point.
360 Rosemary is under construction next to Rosemary Square, formerly CityPlace, a shopping, dining and residential complex that was built by Related in 2000.
NewDay USA expects to move into its office at 360 Rosemary in the fall.