Flagstar undergoes layoffs and rebrands as part of the acquisition
Mr. Cooper Group has finalized its $1.3 billion acquisition of Flagstar Bank’s mortgage operations, while Flagstar undergoes extensive restructuring and rebranding efforts.
The cash deal, which expands Mr. Cooper's servicing portfolio, includes mortgage servicing rights (MSRs), advances, subservicing contracts, and Flagstar's third-party origination platform. The acquisition expands Mr. Cooper's reach, bringing its total customer base to over six million.
“We now serve more than six million customers, and for every single customer we are dedicated to keeping the dream of homeownership alive and to finding ways to achieve their financial goals,” Mr. Cooper Group president Mike Weinbach said in a statement.
“This acquisition demonstrates our ability to deliver full-service solutions to financial institutions and other clients, helping them manage their balance sheet and legacy and ongoing operations to achieve their strategic goals,” said Mr. Cooper chairman and CEO Jay Bray.
Bray added that the company expects to fully integrate Flagstar’s operations onto its platform by early 2025.
Flagstar has already cut 700 jobs, roughly 8% of its workforce, and another 1,200 employees in the mortgage servicing unit face transitions as their division changes hands. However, Flagstar has indicated that many of these employees will have opportunities to transition to Mr. Cooper.
Read more: Flagstar Bank to lay off 700 workers, more expected after mortgage servicing unit sale
"While these strategic actions involve difficult decisions, including impacts on jobs, we believe they are essential for strengthening our financial foundation and building a more agile, competitive company," explained Flagstar CEO Joseph Otting.
The bank has maintained a substantial retail presence with over 400 branches and approximately 90 private banking teams across the New York City metropolitan area and West Coast.
In a related development, New York Community Bank (NYCB) plans to adopt the Flagstar name later this month, marking another step in consolidating operations under a unified brand. This followed earlier initiatives to modernize the bank's branch network and service offerings.
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