Freedom Mortgage’s acquisition of RoundPoint Mortgage Servicing gives it a major subservicer and will increase the Mount Laurel N.J.-based company’s mortgage servicing rights portfolio by nearly 44%.
Both companies are privately held. The deal calls for Charlotte, N.C.-based RoundPoint to become a wholly owned subsidiary of Freedom. Other terms of the transaction were not disclosed.
When the deal is completed, which is expected to occur in the third or fourth quarter, Freedom’s MSR portfolio will be in excess of $300 billion. RoundPoint currently services and subservices $91 billion.
“This merger will create a much larger and stronger organization with significant synergies,” RoundPoint CEO Kevin Brungardt said in a press release. “RoundPoint will benefit operationally in many ways, including having access to Freedom Mortgage’s substantial origination platform.”
In April, RoundPoint announced approval by Freddie Mac and Fannie Mae to service and purchase e-notes.
RoundPoint started in 2007 at a time when investors purchased distressed mortgage loans and needed to perform the servicing function. The company was No. 36 on National Mortgage News’ 2019 Best Mortgage Companies to Work For.
Besides the subservicing business, RoundPoint started a retail mortgage production operation in 2017 as the company looked to expand its origination capabilities to home purchase loans and beyond portfolio defense. It also acquires loans on a correspondent basis.
Freedom has its own retail and correspondent divisions, as well as originating loans through the broker/wholesale channel. The transaction broadens the scope of Freedom’s co-issue origination network. A co-issue is when a mortgage banker sells directly to one of the agencies, while at the same time selling the MSRs to an approved servicing partner.
Freedom acquired a number of companies in the past, including the mortgage banking business of Sterling Bancorp of Montebello, N.Y., in August 2016.
Freedom also purchased JPMorgan Chase’s U.S. Department of Agriculture mortgage production operation in April 2016.
However, Freedom was also one of the companies temporarily restricted by Ginnie Mae from putting Veterans Affairs-guaranteed mortgages into multi-issuer pools over accusations of churning. That restriction has been lifted.
Goldman Sachs served as financial advisor to RoundPoint and Sidley Austin served as legal counsel. Classic Strategies Group served as financial advisor to Freedom and Zuckerman Gore Brandeis & Crossman served as legal counsel.