A recently acquired mortgage servicer is emerging as a potential player with its growing acquisitions of mortgage servicing rights.
Matrix Financial Services Corp. was acquired during the second quarter of this year by Two Harbors Investment Corp., a real estate investment trust that invests in residential mortgage-backed securities, residential loans, MSRs and other financial assets.
Two Harbors reports that Matrix is approved as a seller-servicer with Fannie Mae, Freddie Mac and Ginnie Mae.
As of Sept. 30, Two Harbors said that its owned MSRs on 14,000 home loans for $1.7 billion.
But a flow-sale agreement reached in November between Matrix and PHHÂ Corp. is likely to increase the size of the portfolio.
The two-year deal calls for the sale of MSRs on up to half of PHH’s new originations that are eligible for sale. PHH reported $56 billion in 2012 mortgage production and $42.9 billion in volume during the first nine months of 2013.
Two Harbors took another step this week to boost its servicing portfolio.
On Wednesday, Minnetonka, Minn.-based Two Harbors announced that Matrix reached an agreement to acquire a bulk pool of MSRs from Flagstar Bank, FSB.
The transaction includes MSRs on around $40.7 billion in Fannie and Ginnie mortgages.
Matrix will pay $500 million for the MSRs.
The acquisition is expected to close by the end of this month, subject to customary closing conditions.
Two Harbors President and Chief Executive Officer Thomas Siering noted in the announcement, “This purchase represents substantial ongoing progress related to our MSR investment initiative.”
A statement from Flagstar Bank-parent Flagstar Bancorp Inc. indicates that the sale represents 55 percent of its MSRs.
The Troy, Mich.-based firm previously reported that its third-party servicing portfolio fell to $68.3 billion as of Sept. 30 following the sale of MSRs on $12.7 billion in loans.
Flagstar, which will act as the sub-servicer of the loans included in the sale, will receive sub-servicing income and retain a portion of the ancillary fees.
“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,” Flagstar President and CEO Alessandro DiNello said in the news release. “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.”
