HomeStreet Inc., the Seattle-headquartered parent company of HomeStreet Bank, has announced the sale of 50 of the bank’s single-family mortgage origination offices to Homebridge Financial Services, headquartered in Woodbridge, N.J.
Homebridge has agreed to a purchase price of the net book value of the acquired assets plus a premium, as well as the assumption of certain home loan center and fulfillment office lease obligations. In the event Homebridge realizes a certain level of loan originations for the 12 months following the closing of the transaction, HomeStreet will be entitled to an additional payment of $1 million at that time. Homebridge will also make employment offers to HomeStreet’s related personnel.
HomeStreet Bank also announced that it has sold a significant portion of its single-family mortgage servicing rights related to single-family mortgage loans held by or pooled in securities guaranteed by Fannie Mae and Freddie Mac with aggregate unpaid principal balances of approximately $9.9 billion to New Residential Mortgage LLC, and has also sold of mortgage servicing rights related to single family mortgage loans pooled in Ginnie Mae mortgage-backed securities (MBS) with aggregate unpaid principal balances of approximately $4.4 billion to PennyMac Loan Services LLC.
“The sale of the home loan center-based mortgage origination business and related servicing rights will significantly reduce the size and scope of HomeStreet’s single family mortgage operation,” said Mark K. Mason, HomeStreet Chairman, President and CEO. “These transactions align with our long-term strategic goal of reducing our reliance on this cyclical and volatile earnings stream and increasing our reliance on the more stable earnings from our Commercial and Consumer banking business. We believe our network of office locations and origination personnel complements the existing Homebridge business well. We thank those employees that are part of the Transaction for their hard work and contribution to our success of converting a troubled thrift into a leading West Coast, major market footprint, regional bank.”
Mason added that the sale of the servicing rights “also provides the regulatory capital relief to not only support the continued growth of our commercial and consumer banking business, but also supports a share repurchase program underscoring our confidence in HomeStreet’s future performance and long-term value creation for our shareholders.