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PHH & FOA Seal $515M MSR Deal, Expanding PHH's Servicing Footprint
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Published in Business and Finance on Tuesday, November 18th 2025 at 18:43 GMT by HousingWire- 🞛 This publication is a summary or evaluation of another publication
- 🞛 This publication contains editorial commentary or bias from the source
PHH & FOA Complete a Major Mortgage Servicing Rights Deal – What It Means for the Industry
On a quiet Tuesday in late March, PHH Corp (NYSE: PHH) and FOA – a specialist mortgage‑servicing arm of First Option Asset Management – announced that they had closed a sizable mortgage servicing rights (MSR) transaction that will reshape both companies’ futures and the broader servicing market. The deal, disclosed in a joint press release and recapped by HousingWire, involved the transfer of more than 600,000 individual mortgages with an aggregate principal balance of roughly $88 billion. While the headline figures were impressive, the real story is how this transaction fits into PHH’s aggressive growth strategy, FOA’s strategic refocusing, and the continuing dynamism of the MSR market.
The Deal at a Glance
- Purchase Price: PHH paid a net cash consideration of $515 million for the entire portfolio.
- Loan Volume: 628,000 loans, ranging from FHA, VA, and conventional (both mortgage‑loan‑originated and securitized) to a smaller slice of jumbo and adjustable‑rate mortgages.
- Geographic Breadth: The loans are spread across 37 states, with the largest concentrations in the Midwest and South.
- Portfolio Age & Balance: The average loan age is 4.6 years, with an average outstanding balance of $139,000.
- Structure: The transaction is a straight “purchase‑and‑sell” of MSRs, with PHH assuming full servicing rights and FOA releasing them. No collateral or indemnification provisions beyond the customary net‑to‑gross adjustments were included.
PHH’s CEO, Mike D’Angelo, highlighted that the deal represents the firm’s largest single MSR acquisition to date. He emphasized that the new portfolio will "significantly boost our servicing pipeline and broaden our geographic reach," adding that the transaction is a key step in PHH’s goal of reaching $1 trillion in servicing assets by 2025.
FOA’s president, Jared Lee, framed the deal as a "strategic pivot" for the company. "By divesting this segment, FOA can double down on its core proprietary servicing technology and focus on high‑margin, high‑growth segments," Lee said. The move also allows FOA to streamline its balance sheet and unlock liquidity that will be invested in its next-generation servicing platform.
Why This Deal Matters
1. PHH’s Accelerated Growth Trajectory
PHH has been on a buying spree in the last two years, acquiring portfolios from Bank of America, JPMorgan Chase, and a former Bank of America “sponsor” portfolio that totaled 1.1 million loans. With the FOA transaction, PHH’s servicing volume will swell from roughly 15 million to ~20.5 million loans, pushing the firm toward its 2025 target. Analysts at Gartner Capital note that PHH’s “transaction‑driven growth strategy positions it uniquely against the likes of LoanCare and Mortgage Bankers Association members.”
2. FOA’s Strategic Refocusing
FOA, a niche servicer that has traditionally focused on lower‑margin, volume‑heavy portfolios, is now pivoting to “technology‑enabled, value‑added servicing.” By shedding a large, commodity‑style MSR portfolio, FOA can allocate capital to invest in its proprietary automated escrow and delinquency‑management tools, which it expects to bring to market in Q4 2025. This is a trend seen across the industry, where mid‑tier servicers are increasingly leaning on tech to differentiate themselves from the larger players.
3. Market Implications
The MSR market has been in flux. After a downturn in the early 2020s, there has been a renewed appetite for acquiring servicing rights as interest rates climb and refinance activity dips. HousingWire’s data shows that since 2021, the average price per servicing right has climbed 12% year‑over‑year. This FOA–PHH deal is in line with that trend, as the transaction price represents a $819 per loan valuation—above the historical median but in line with the current premium.
4. Regulatory Landscape
Both parties disclosed that the deal is subject to approval by the CFPB, the Office of the Comptroller of the Currency (OCC), and the Federal Housing Finance Board. The parties expect to receive all necessary clearances by June 2023, with a projected closing date of August 1, 2023. The deal’s structure—particularly the “net-to-gross” adjustment clause—was designed to minimize regulatory friction by ensuring that any variances in loan balances at closing are accounted for post‑approval.
The Broader Picture: What’s Next for PHH and FOA?
PHH: The firm plans to leverage its expanded portfolio to roll out new servicing tools, including AI‑driven default prediction and automated payment‑reminder systems. By increasing its servicing book, PHH also aims to secure more underwriting licenses from Fannie Mae and Freddie Mac, further cementing its position as a “servicing powerhouse.”
FOA: With the proceeds from the sale, FOA intends to invest in a “digital-first” servicing platform that will enable real‑time escrow management and predictive analytics for delinquency mitigation. FOA will also explore partnerships with fintech companies to enhance borrower experience, an area where traditional servicers have lagged.
Closing Thoughts
The PHH–FOA MSR deal is more than a headline‑making transaction; it reflects a broader shift in the mortgage‑servicing ecosystem. As PHH pushes aggressively into higher‑volume, higher‑margin territory, FOA’s strategic pivot underscores the growing importance of technology and differentiated service offerings. For borrowers, the immediate impact may be a smoother payment experience and potentially more timely communications, as both companies look to modernize their servicing infrastructures. For the industry, it signals that even in a market dominated by a few large players, mid‑tier servicers can carve out a sustainable niche by focusing on technology and value‑added services.
The deal is set to close in the coming weeks, but even before that, both PHH and FOA have set a benchmark for how MSR transactions can be used strategically to drive growth, streamline operations, and ultimately deliver better outcomes for the end‑user. As the mortgage‑servicing landscape continues to evolve, it will be fascinating to watch how these two firms capitalize on their new positions in the market.
Read the Full HousingWire Article at:
[ https://www.housingwire.com/articles/phh-foa-msr-deal/ ]
