In acquisition mode, Planet closes a $10B MSR deal | SkipLeadPro
Connecticut-based lender and servicer Planet Home Lending announced on Thursday a deal that boosts its servicing portfolio, which the company claims is already above the $90 billion mark.
Planet has acquired a $10 billion mortgage servicing rights (MSR) bulk of Ginnie Mae loans from Village Capital & Investment LLC. and anticipated that it will continue bidding for MSRs in the second half of the year, engaging in bulk and co-issue transactions.
The deal with Village consists of 45,000 home loans securitized by Ginnie Mae. To understand the profile of the loans, Nevada-based mortgage banking company Village moved its focus to the Federal Housing Administration (FHA) Streamline Refinance program in 2011, per its website. The company claims it keeps costs low and uses targeted marketing techniques to pass savings to its borrowers through lower rates.
The transaction adds billions in servicing rights to a growing servicing company.
Planet was the 29th largest servicer in the country in the first quarter of 2023, with a $68.5 billion owned mortgage servicing portfolio, according to Inside Mortgage Finance (IMF) estimates. The volume in Q1 2023 was 68.3% higher than in the same period last year, the data shows.
However, Planet claims its servicing portfolio stood at $94 billion as of June 2023, and the deal with Village increases its MSR book by 10.6%. In early May, the company launched a commercial servicing division led by James DePalma and Janina Woods.
Planet was very active in MSR deals in the first half of 2023.
“We bought $12.5 billion in MSRs [the Village deal is included]. And in some of the larger deals, there was a fight against other bidders. Very competitive,” Michael Dubeck, CEO and president of Planet Financial Group, parent of Planet Home Lending, told HousingWire during an interview in mid-May. “A big acquisition was settled in April. And we probably did six smaller ones in February, March, and April,” Dubeck added.
According to Dubeck, Planet remains a “liquidity provider to mid- and smaller-tier issuers, providing competitive prices to sellers. In May, Planet closed a $150 million increase to its conventional MSR facility because, “Naturally, companies need bigger lines as they grow,” Dubeck said.
Industry observers said 2023 will be a “bull year” for MSR trading, with assets on lower-rate legacy loans dominating the market and a robust demand.
HousingWire reported that Rocket Mortgage sold about $20 billion in MSRs to JPMorgan Chase in April, following a decline in its servicing book in the first quarter of 2023, amid a challenging operating environment.
Wells Fargo also put an MSR portfolio worth roughly $50 billion up for auction and Mr. Cooper won this deal, sources told HousingWire. Mr. Cooper will inherit Home Point Capital’s $84 billion servicing portfolio as part of its acquisition of the company for $324 million in cash.