Skip to main content

Flagstar to Sell Off $40.7 Billion in MSRs

Dec 19, 2013

Flagstar Bancorp Inc. has announced that the bank has entered into a definitive agreement to sell a substantial portion of its mortgage servicing rights (MSRs) portfolio to Matrix Financial Services Corporation, a wholly-owned subsidiary of Two Harbors Investment Corporation. The agreement provides for the sale of $40.7 billion in aggregate unpaid principal balance of residential MSRs, which represented 55 percent of Flagstar's mortgage loans serviced-for-others portfolio as of September 30, 2013. Covered under the agreement are certain mortgage loans serviced for both Fannie Mae and Ginnie Mae, originated primarily after 2010.  The acquisition is expected to close before the end of the year, and is subject to customary closing conditions. A central component of this transaction is that Flagstar will act as the sub-servicer on all of the mortgage loans underlying the MSRs being sold under the agreement. As a result, Flagstar will receive sub-servicing income and retain a portion of the ancillary fees to be paid as the sub-servicer of the loans. Unless terminated earlier in accordance with its terms, the sub-servicing agreement will remain in effect so long as mortgage loans underlying the MSRs remain outstanding. "Today's transaction is an important step in our continued effort to augment our mortgage origination business, thus better positioning Flagstar to deliver improved financial performance and increased shareholder value," said Alessandro (Sandro) DiNello, Flagstar's president and chief executive officer.  "We periodically evaluate the sale of MSRs as a way to reduce the concentration of the asset and strengthen the quality of our capital, and we are pleased to be able to achieve a significant transaction in MSRs while also retaining the underlying sub-servicing associated with the asset itself." "This transaction significantly reduces our MSR concentration and demonstrates continued progress in management's efforts to strengthen the balance sheet," said Lee Smith, Flagstar's Chief Operating Officer. "Equally important, we are able to utilize Flagstar's servicing platform to generate on-going servicing revenue and diversify the Company's operations. We believe our re-branded servicing platform presents an attractive opportunity for organizations that are looking to purchase MSRs and have Flagstar sub-service those loans, and we believe there is a growing market for such services."
About the author
Published
Dec 19, 2013
HUD Freezes Foreclosures On FHA Mortgages In Texas Flood Zone

Kerr County homeowners among hardest hit in disaster that’s claimed more than 100 lives

Jul 09, 2025
Fewer Canadians Hunt For U.S. Property

Largest component of international buyers in U.S. takes more than 25% hit

Jul 08, 2025
Fannie, Freddie Now Allow Lenders To Use VantageScore 4.0

Lenders will keep tri-merge credit scoring model; what this shift means

Fairway Independent Mortgage Corporation Announces Rebranding

Now Fairway Home Mortgage, company also donates $1M to support relief efforts in deadly Texas flooding

Jul 07, 2025
FHFA Chief Officially Calls For Investigation Of Federal Reserve Chairman Powell

Alleges Powell lied in testimony to Congress regarding Fed building renovations, says Fed Chair should be fired

BBB Will Impact Homeowners, Buyers

U.S. House and Senate must agree on certain tax, mortgage insurance premium deductions