Flagstar Bancorp (FBC) is the latest firm to shift its outlook on how to handle mortgage servicing.
The Troy, Mich.-based bank confirmed that the company is outsourcing its non-core default servicing business – a segment that makes up less than 4% of the firm’s servicing book.
After the shift, the company will focus solely on servicing performing assets.
A specialty servicer will be taking over the default servicing side. The change is expected to occur by the end of the third quarter.
Flagstar cited a desire to work with impacted employees, but ultimately the move will effect 300 positions in the non-performing mortgage servicing business.
"Improving company-wide efficiency and carefully managing expenses is consistent with our plan to build long-term shareholder value," said Sandro DiNellow, president and CEO of Flagstar.
"By focusing our mortgage servicing business on core, performing mortgages, we seek to enhance Flagstar's profitability and be even better positioned to serve our clients and capitalize on value-enhancing opportunities. Further, this action will better position our servicing department for long-term growth. We remain deeply committed to our community banking in Michigan and our mortgage origination and servicing, and look forward to continuing to meet and exceed the needs of our clients and communities."