Freedom Mortgage sells RoundPoint to Two Harbors after 2 years

Abstract

Freedom Mortgage has moved on from RoundPoint Mortgage Servicing Corp. barely two years after it closed on the acquisition. Matrix Financial Services, a subsidiary of real estate investment trust Two Harbors Investment, agreed to purchase RoundPoint at a $10.5 billion premium to the servicer's tangible net book value. Loan transfers to the RoundPoint platform are expected to begin in the fourth quarter of 2022."The transaction recognizes the strategic value of our experienced team, robust platform, and dedication to serving our customers well," RoundPoint CEO Patrick McEnerney said in a press release. Freedom agreed to acquire RoundPoint in May 2019, but the deal didn't close until August 2020, after RoundPoint sued to enforce specific performance of the merger agreement. "Our acquisition of RoundPoint marks an evolution in our MSR strategy which will deliver long-term financial and strategic benefits to Two Harbors," stated Bill Greenberg, Two Harbors' president, CEO and chief investment officer. "The operational efficiencies and revenue opportunities it presents will add value for shareholders while deepening our involvement in the industry."Two Harbors will gain approximately $20 million in incremental annual pretax earnings by bringing servicing in-house with RoundPoint, due to additional revenues and cost savings from vertically integrating self-servicing capabilities. Cadwalader, Wickersham & Taft was legal advisor to Two Harbors, while Hunton Andrews Kurth served the same function for Freedom and RoundPoint.