Carrington Mortgage Services has completed its acquisition of Valon Mortgage, adding approximately 810,000 loans to its servicing platform and moving forward with plans to adopt ValonOS as its core servicing technology.
The closing follows the strategic partnership announced in May, when Carrington agreed to acquire Valon Mortgage and make ValonOS its core servicing platform. At the time, the companies said the acquired portfolio included approximately 800,000 loans representing roughly $197 billion in unpaid principal balance. The final loan count is approximately 810,000.
The combined servicing portfolio is expected to approach 2 million loans, substantially expanding Carrington’s scale through Valon Mortgage’s subservicing relationships and asset-acquisition capabilities.
Financial terms were not disclosed.
The transaction is more than a portfolio acquisition. Carrington is pairing its scale and government-servicing experience with technology that Valon developed and tested through its own mortgage-servicing operation. Valon Technologies will now concentrate on selling and developing ValonOS, while Valon Mortgage and its servicing team become part of Carrington.
“The completion of our acquisition of Valon Mortgage marks an important milestone in Carrington’s growth strategy,” said Andrew Taffet, CEO of The Carrington Companies. “After spending more time with ValonOS and seeing how it handles the complexity of government servicing, I am more convinced than ever that it is the right platform for Carrington’s next chapter.”
Taffet said the combination is intended to bring greater speed, control, and consistency to borrowers, investors, and government agencies.
A Test Of AI-Native Servicing At Scale
Carrington’s adoption of ValonOS places an AI-native platform at the center of one of the country’s largest independent servicing operations, including a sizable Ginnie Mae portfolio.
Government-backed loans are among the industry’s most operationally demanding assets to service because of agency reporting requirements, loss-mitigation rules, investor obligations, and the need to assist borrowers experiencing financial hardship. Carrington’s implementation will therefore provide a significant test of whether a newer servicing platform can replace fragmented legacy systems at scale.
Carrington and Valon said they expect to accelerate technology development across conventional, Ginnie Mae, non-QM, private-label securities, and closed-end second-lien products.
The companies also said several existing Valon servicing clients are exploring the transfer of additional portfolios to the combined platform, potentially creating another avenue for Carrington’s growth beyond the loans included in the acquisition.
ValonOS Gains Two Major Servicing Clients
Carrington is the second major servicing operator this year to make a large-scale commitment to ValonOS.
In February, NMP reported that Rithm Capital expanded its partnership with Valon, with Newrez expected to begin transitioning servicing for more than 4 million homeowners to the platform in 2027.
Together, the Carrington and Newrez agreements move ValonOS beyond its original in-house proving ground and into two of the mortgage industry’s largest servicing operations.
Valon Mortgage was founded in 2019 as an operating servicer through which Valon could build and test its technology in a heavily regulated environment. The company grew to service approximately 810,000 loans before its sale to Carrington.
With the transaction completed, Valon Technologies is separating the technology business from the mortgage-servicing operation and focusing on expanding ValonOS across the industry.
“Valon Mortgage was built to prove that ValonOS could operate at the highest level of complexity in mortgage servicing,” said Andrew Wang, CEO and co-founder of Valon. “With the transaction now complete, Valon can focus fully on building the technology infrastructure that powers the broader servicing ecosystem.”
The structure gives Valon a large-scale proving ground for its platform without requiring the technology company to continue operating its own servicer. Carrington, meanwhile, gains Valon Mortgage’s portfolio and a direct role in developing the system on which its servicing operation will depend.
“This is what we set out to build from the beginning: operate a mortgage servicer, prove the technology in production, and then scale that technology beyond our own servicing operation,” said Linda Du, president and co-founder of Valon.
Carrington Continues Its Expansion
The acquisition advances a broader expansion strategy at Carrington, which said it has generated approximately 16% annualized growth since 2007.
Carrington crossed $200 billion in servicing balances earlier this year. The company has also agreed to acquire Reliance First Capital, which would add a direct-to-consumer origination channel, more than 150 Loan Originators and sales managers, and a $3 billion servicing portfolio.
The Valon acquisition expands another side of Carrington’s business: servicing loans on behalf of mortgage owners and institutional clients. It also gives ValonOS a large government-servicing deployment alongside its planned implementation at Newrez.
*This article was drafted with AI assistance and reviewed and edited by a human editor before publication.
