Flagstar Bancorp (FBC) has agreed to sell the majority of its mortgage-servicing rights but will retain the subservicing rights, the Troy, Mich., company said Wednesday.
The $11.8 billion-asset Flagstar will sell residential mortgage-servicing rights with an unpaid principal balance of about $40.7 billion, which represents 55% of its portfolio of loans serviced for others, it said. The buyer is Matrix Financial Services, a subsidiary of the Maryland firm Two Harbors Investment Corp.
Flagstar will be the subservicer for all mortgages associated with the rights being sold and will retain subservicing income and fees, it said. Flagstar expects the deal to close before the end of the year.
"This transaction significantly reduces our MSR concentration and demonstrates continued progress in management's efforts to strengthen the balance sheet," Flagstar Chief Operating Officer Lee Smith said in a news release.
In July, Flagstar agreed to sell subservicing rights on about $3 billion of defaulted mortgages to an unnamed servicer. It sold its document- imaging business in February, and it sold about $1.3 billion in commercial loans to CIT Group in January.