HomeStreet Sells $794mln Ginnie Mae Servicing Portfolio to Specialized Entity

HomeStreet has agreed to sell its $794 million Ginnie Mae mortgage servicing portfolio to a specialized loan servicing entity, with the sale expected to close on August 1, 2025. The deal is not expected to result in a gain or loss for HomeStreet. The company's overall score is neutral, with declining revenues, profitability, and liquidity challenges weighing heavily on its outlook.

HomeStreet, Inc. (HMST) has agreed to sell its $794 million Government National Mortgage Association (Ginnie Mae) mortgage servicing portfolio to an experienced loan servicing entity. The transaction is expected to close on August 1, 2025. According to the company's Form 8-K filing [1], the sale is not anticipated to result in any gain or loss for HomeStreet.

The Ginnie Mae servicing portfolio, valued at $794 million as of June 30, 2025, was carried at its current market value. The Purchase Agreement, which includes customary representations, warranties, covenants, and termination rights, is subject to customary closing conditions. HomeStreet cautions that there can be no assurance that all conditions to closing the sale will be satisfied.

HomeStreet's overall financial outlook remains neutral, with declining revenues, profitability, and liquidity challenges. The company's recent performance has been impacted by various factors, including the ability to successfully consummate a pending merger with Mechanics, regulatory approvals, and changes in the economic environment.

This sale is part of HomeStreet's strategic efforts to focus on core banking functions and reduce operational risks. The company is also facing challenges related to the integration of the merger, maintaining customer relationships, and managing operational costs.

References:
[1] https://www.sec.gov/Archives/edgar/data/0001518715/000151871525000097/hmst-20250716.htm