Residential real estate investment trust (REIT) Annaly Capital Management has agreed to purchase a portfolio of mortgage servicing rights (MSRs) from Pennymac Financial Services. Under the agreement, Pennymac will handle all servicing and recapture activities for the MSR sold to Annaly.
“We look forward to collaborating with Pennymac through this strategic partnership, which enhances our best-in-class network of servicing and recapture relationships with a well-respected, industry-leader that has a proven track record of excellence,” said Annaly Capital CEO & Co-Chief Investment Officer David L. Finkelstein. “Since bringing MSR on balance sheet in 2020, Annaly has become a top 10 servicer of agency MBS with one of the highest-quality and most differentiated portfolios in the industry. We stand to benefit from Pennymac’s strong recapture capabilities and our borrowers will be well-served by their diligent focus on the customer experience.”
Annaly has reported approximately $90 billion in assets invested across its agency MBS, residential credit and MSR strategies. The REIT’s MSR portfolio consists of approximately 680,000 loans, totaling $219 billion in unpaid principal balance and $3.3 billion in market value as of June 30, 2025. The company’s MSR portfolio consists of high-quality conventional loans with a weighted average FICO of 757 at origination and average note rate of 3.24%.
“As we continuously look to optimize our capital and maintain prudent leverage, we are very pleased to announce this strategic, long-term partnership with a premier market participant like Annaly,” said David A. Spector, Chairman and CEO of Pennymac. “We’re especially excited to continue subservicing and providing recapture activities for this portfolio, which accelerates the growth of our new subservicing business. This sale continues our efforts to drive the concentration of our MSR portfolio toward higher-rate loans with significant recapture potential, and is a prime example of our active capital management activities.”
Pennymac Financial’s total servicing portfolio grew to $699.7 billion in unpaid principal balance (UPB) in Q2, an increase of 3% over Q1, and 11% over Q2 2024. PennyMac’s owned MSR portfolio grew to $469.9 billion in UPB, an increase of 5% from March 31, 2025 and 17% from June 30, 2024. Pennymac subservices $228.8 billion in UPB for PennyMac Mortgage Investment Trust, $823 million in UPB of previously-owned servicing that has been repurchased by the United States Veterans Affairs (VA) pursuant to the Veterans Affairs Servicing Purchase program on an interim basis, and $72 million in UPB for other non-affiliates.
