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Mr. Cooper won’t be onboarding as many Flagstar Bank employees as initially projected in its $1.4 billion deal to acquire the depository bank’s residential mortgage servicing operations.
Multiple sources told HousingWire that Flagstar began layoffs on Friday. The employees said that additional terminations will be staggered over the coming months, with official severance documents to come at a later date.
A spokesperson for Mr. Cooper, which struck a deal in July 2024 to acquire Flagstar’s servicing and third-party originations (TPO) businesses for $1.4 billion in cash, said that the company had “welcomed more than 500 team members” from Flagstar.
“At this time, we have successfully boarded the bulk of the servicing portfolio, and through this integration we have determined that we will not bring on as many team members from Flagstar as anticipated,” the spokesperson said. “We are committed to being transparent and respectful during this time and are working in partnership with Flagstar to ensure team members are supported as they transition to the next phase of their careers.”
The spokesperson said that when the integration is complete, Mr. Cooper will have onboarded approximately 350 servicing team members and 175 TPO members from Flagstar. The third-party originations team members will transition to non-QM lender A&D Mortgage.
“Roughly 400 positions are being impacted by the changes,” the spokesperson said.
When the deal was first announced, Mr. Cooper projected to bring on about 1,200 Flagstar team members in total.
The news that fewer employees than projected will join Mr. Cooper comes just days after the Mortgage Bankers Association lowered its 2025 projections for refinancing origination volume.
Mr. Cooper, headquartered in Dallas, is a heavy hitter in the mortgage space. It now has north of $1.5 trillion in its servicing portfolio and has made big upgrades in technology to help recapture loans. CEO Jay Bray sat down with HousingWire in December for an exclusive interview.
