Hatteras Financial (HTS), a real estate investment trust, announced the acquisition of Pingora Asset Management and Pingora Loan Servicing, a specialized asset manager focused on investing in new production performing mortgage servicing rights and servicing residential mortgage loans.
Financial terms of the deal were not disclosed.
In addition to acquiring Pingora, Hatteras agreed to finance Pingora’s purchase of MSRs related to qualifying mortgage loans that Pingora has agreed to purchase under its current flow agreements while the transaction is being finalized.
According to the terms of the deal, Hatteras will receive the servicing economics related to the corresponding pools of MSRs purchased by Pingora on a monthly basis, the companies said in a release.
Hatteras said that it estimates that it will invest an average of $25-50 million in MSRs per month under this arrangement.
The parties expect the deal to close in the third quarter of 2015. Under the terms of the deal, Pingora, its management team and employees will remain headquartered in Denver.
“I am delighted to announce this acquisition and the expanded capabilities we will have in the mortgage market,” said Michael Hough, Hatteras’ chief executive officer and chairman. “Michael Lau and his team have built an industry leading operating platform for investing in MSRs, and we are fortunate to add their portfolio management and master servicing oversight capabilities at Hatteras.”
Hough said Hatteras expects to leverage Pingora’s platform and begin investing in MSRs in July through Pingora’s established flow MSR acquisition business.
“Pingora’s focus on developing strategic partnerships with mortgage originators and purchasing flow-based primary market MSRs directly from them is a natural fit with Hatteras and our current agency securities and jumbo ARM flow business,” Hough said. “We expect Pingora’s partnerships will help grow our existing direct mortgage purchase program to a more meaningful scale.”
Michael Lau, Pingora’s chief executive officer, said he believes the deal can be mutually beneficial.
“We are very excited to join forces with Hatteras,” Lau said. “We share a vision on this opportunity and think our companies’ management styles and views on the mortgage industry dovetail well. I am confident that the combination of Pingora’s unique approach and Hatteras’ conservative asset management will be the foundation for a best-in-class multi-strategy mortgage REIT. This transaction comes at an important time in Pingora’s growth cycle and I believe that our combined skillsets will be positive for both organizations.”
(h/t Rob Chrisman)