PennyMac Financial Services has announced a definitive agreement to acquire the subservicing business of Cenlar Capital Corporation, a move that will significantly expand PennyMac’s presence in the U.S. mortgage servicing market.
The all-cash transaction carries an upfront purchase price of $172.5 million, with up to $85 million in contingent consideration payable over the next three years upon meeting agreed milestones.
“Our team at Cenlar has been dedicated to building the nation’s leading subservicing organization, grounded in a deep commitment to our clients,” said David Schneider, president and CEO at Cenlar. “By combining Cenlar’s market-leading expertise with a top lender and servicer like Pennymac, we are forming the strongest subservicing platform in the industry. I am incredibly proud of what the Cenlar team has achieved and look forward to this next chapter as we collectively deliver superior scale, technology, and care to the millions of homeowners we serve.”
Under the terms of the deal, PennyMac will acquire Cenlar’s subservicing contracts and related mortgage servicing operations. Cenlar’s existing portfolio is projected to add approximately $740 billion in unpaid principal balance (UPB) and roughly two million loans to PennyMac’s servicing book, pushing the company’s total servicing portfolio to in excess of $1 trillion in UPB.
“We are thrilled to announce this transformative step in our company’s evolution,” said David Spector, chairman and CEO of PennyMac. “Having worked closely with the Cenlar team, we have reached an agreement that represents a compelling value proposition for our stockholders, Cenlar’s institutional clients, and their clients’ borrowers, as well as the many talented professionals joining Pennymac. Upon completion of this acquisition, Pennymac will become the second largest mortgage servicer overall and one of the largest subservicers in the U.S. Leveraging industry-leading SSE technology, this further strengthens Pennymac’s position as a partner of choice for institutional subservicing and is expected to drive the growth of capital-light, fee-based revenue streams at significant scale. We operate a best-in-class platform with superior operational performance and efficiency. With this transaction, we expect to realize powerful synergies that further reinforce our standing as the market’s most technologically advanced servicer.”
Subject to customary closing conditions and regulatory approvals, the transaction is expected to close in the second half of 2026. As part of the closing, Cenlar will surrender its bank charter, and PennyMac will integrate the subservicing business as a non-bank entity focused exclusively on mortgage subservicing. The transition will include a methodical onboarding of approximately 100 institutional clients and their borrowers, with an emphasis on enhanced service delivery.
Advisors on the transaction include Santander US Capital Markets LLC and Goodwin Procter LLP for PennyMac, and Houlihan Lokey Capital and Sullivan & Cromwell LLP for Cenlar.
