HomeStreet has potential buyer for its mortgage operations

HomeStreet in Seattle has agreed to sell its mortgage business to Homebridge Financial Services in Iselin, N.J.

The $6.9 billion-asset HomeStreet said in a press release Wednesday that Homebridge plans to buy its stand-alone home loan centers and hire related mortgage personnel. The companies are currently operating under a letter of intent while working on a definitive agreement.

“We are excited to be working with Homebridge as the potential home for our high performing network of home loan centers and personnel,” Mark Mason, HomeStreet’s chairman, president and CEO, said in the release.

“Our network of office locations and origination personnel complement the existing Homebridge business well,” Mason added. “We hope to conclude our negotiations and announce a transaction in the first quarter, and to begin the process of moving our home loan centers, fulfillment facilities and mortgage personnel to their new home.”

HomeStreet plans to keep originating mortgages through its branches, online banking services and affinity relationships.

HomeStreet said earlier this month that it would sell the mortgage business, attributing the decision to rising interest rates and home prices that have lowered demand for mortgages, as well as continuing regulatory challenges.

Blue Lion Capital, an activist investor, had pushed for HomeStreet to close mortgage offices that were unable to earn their cost of capital and shed its portfolio of mortgage servicing rights, based on claims that the business lacks scale and is based in the expensive Seattle area.