What to Know About Flagstar Bank Mr Cooper Sale

Flagstar Bank's sale to Mr. Cooper is a significant development in the mortgage industry. Flagstar Bank is a large mortgage lender in the US, with a significant presence in the market.

Mr. Cooper, the company purchasing Flagstar, is a well-established mortgage servicer with a strong reputation for customer service. The acquisition is expected to create a major player in the mortgage industry.

The sale is valued at approximately $2.5 billion, a significant transaction in the financial sector.

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Mr. Cooper is acquiring Flagstar's servicing and TPO businesses for $1.4 billion in cash.

The deal includes over 1,000 Flagstar employees who will be offered the opportunity to join Mr. Cooper.

The acquisition adds 1.3 million customers to Mr. Cooper, improving NYCB's capital level.

Mr. Cooper will fund the deal through available cash and drawdowns of existing MSR lines.

The transaction is expected to close in the fourth quarter of 2024.

Mr. Cooper has a strong operational capacity to onboard Flagstar's customers with a smooth and positive experience.

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Flagstar employees were informed of the sale by President of Mortgage Lee Smith in a call.

The pending transaction is the largest mortgage M&A deal of the 2022-2024 cycle.

Flagstar's TPO business is largely correspondent, though it does also work with mortgage brokers.

The acquisition includes $356 billion in mortgage servicing rights and subservicing contracts.

Mr. Cooper plans to fund the deal through a combination of available cash and drawdowns of existing MSR lines.

The deal is expected to add approximately 60 basis points to NYCB's CET1 capital ratio.

Mr. Cooper has a strong reputation in the mortgage origination and servicing business.

Flagstar's mortgage servicing platform is well-respected throughout the industry.

Here are the key details of the acquisition:

Flagstar Bank has agreed to sell its residential mortgage servicing business to Mr. Cooper for approximately $1.4 billion. This deal encompasses mortgage servicing rights (MSRs), sub-servicing contracts, advances, and a third-party origination platform.

The sale is expected to enhance Flagstar's Common Equity Tier 1 (CET1) capital ratio by approximately 60 basis points. This will help Flagstar shift towards becoming a fully diversified regional bank.

The transaction is expected to close in the fourth quarter of 2024. Mr. Cooper will pay $1.4 billion in cash, funded via available cash and drawdowns of existing MSR lines.

Over 1,000 Flagstar employees will be offered the opportunity to join Mr. Cooper. This is a significant development for both companies, as it will add 1.3 million customers to Mr. Cooper's portfolio.

Here's a breakdown of the key details of the transaction:

Mr. Cooper has the operational capacity to onboard Flagstar's customers with a smooth and positive experience. This is a top priority for the company, which has a strong reputation for customer service.

You might be wondering how this transfer will affect you as a customer. Your most important details will remain the same, but there are a few changes to keep in mind. The loan terms will stay the same.

If you made a recent payment to Flagstar, it will be forwarded to Mr. Cooper automatically, and you won't incur any late fees or negative credit impact. This automatic forwarding will continue for 60 days after the transfer date.

You'll need to update your bank's bill pay information if you use online banking to make payments. This is a simple step to ensure your payments continue smoothly. You'll also need to update your homeowner's insurance company about the transfer and the Mortgagee Clause listed on the account.

Here are the key things to keep in mind:

So, you're probably wondering what changes to expect with your loan or account information. The good news is that your most important details will remain the same, but there are a few changes to keep in mind.

Your loan terms will stay the same, which is a relief. If you were applying for mortgage assistance, this process will continue with Mr. Cooper, and they'll be in touch with any next steps.

You'll have a new Mr. Cooper loan number, which you can find on your welcome letter or through their Welcome page. This is an important number to keep track of.

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Here are some specific changes to expect:

One thing to keep in mind is that if you were enrolled in paperless delivery for one or more Flagstar Bank statements or documents, you will be enrolled in paperless delivery for all statements and documents with Mr. Cooper.

The lender may not own the loan, and that's okay. In fact, lenders usually sell mortgages to other organizations after a loan closes.

Flagstar, for example, may have been your lender, but that doesn't necessarily mean they own the loan. They could be the servicer, handling payments and sending statements.

The lender's role is often different from the servicer's role. If you want to know more about who owns mortgages, you can check out our article on the topic.

Flagstar may have given you the money for the loan, but if they sold the mortgage to another company, that company is the new owner.

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Flagstar Bank has announced the sale of its mortgage servicing business to Mr. Cooper for approximately $1.4 billion. The transaction is expected to close during the fourth quarter of 2024.

The sale will add around 60 basis points to Flagstar's CET1 capital ratio, as converted for the remaining outstanding Series B Preferred Stock. This is a significant move for the bank, which is focused on transforming into a leading, relationship-focused regional bank.

Chairman, President, and Chief Executive Officer Joseph M. Otting commented on the announcement, stating that the mortgage servicing business has made significant contributions to the Bank. However, the inherent financial and operational risk in a volatile interest rate environment, along with increased regulatory oversight for such businesses, were also taken into consideration.

Flagstar will continue to provide residential mortgage products to its retail and private wealth customers. This move is consistent with the bank's strategy to focus on relationships and customer service.

Mr. Cooper is a major player in the mortgage origination and servicing business, with a strong reputation for customer service excellence and employee values.

The acquisition of Flagstar's mortgage servicing unit by Mr. Cooper is a significant strategic move that positions both entities for future growth and operational synergy.

This partnership has the potential to bring about greater efficiency and cost savings, which can be passed on to customers in the form of better mortgage products and services.

With Mr. Cooper's expertise in mortgage servicing and Flagstar's experience in the industry, they are well-equipped to tackle the challenges of the mortgage market and come out on top.

Their combined strength will enable them to offer a wider range of mortgage solutions to customers, making it easier for people to buy, sell, or refinance their homes.

This acquisition marks a new chapter in the mortgage servicing industry, and it will be exciting to see how Mr. Cooper and Flagstar work together to drive growth and innovation.

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