HomeStreet is selling its $794 million Ginnie Mae mortgage servicing portfolio as the Seattle-based bank continues shifting its balance sheet strategy ahead of a planned merger with California’s Mechanics Bank. The transaction was disclosed in a July 16 filing with the Securities and Exchange Commission, first spotted by Business Journals, which states that the sale is expected to close on August 1. In the filing, HomeStreet describes the buyer only as an entity with experience servicing loans, including those backed by Ginnie Mae, though it does not name the purchaser.
Because the portfolio was carried at current market value as of June 30, 2025, HomeStreet does not expect to record a gain or loss from the sale. The company has not disclosed details about the nature of the underlying loans—such as whether they are single-family, multifamily, or another asset class—and the SEC Form 8-K does not refer to loan type.
Although the loan composition remains unspecified, the transaction is significant in the context of today’s Ginnie Mae servicing market. Ginnie Mae-backed servicing rights, while often associated with single-family mortgages, also cover rural housing, healthcare-backed loans, and multifamily properties. The servicing market for these portfolios has remained liquid, buoyed by agency guarantees that mitigate credit risk for investors—even with persistent uncertainty across real estate financing.
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This is the second high-profile portfolio sale HomeStreet has undertaken in recent months. In December 2024, the bank sold $990 million in commercial real estate loans to Bank of America at roughly 92% of principal value, generating approximately $906 million in proceeds. At the time, HomeStreet said the funds were used to reduce borrowings from the Federal Home Loan Bank.
This move sends a broader signal about liquidity, valuation levels and risk management across agency-backed servicing platforms. The scale and structure of the transaction provide insight into how regulated banks are navigating today’s capital markets: namely, that there is a broad de-risking effort by regional banks, many of which are rebalancing asset exposures or preparing for M&A transitions. The deal may also serve as a reference point for other institutions considering similar asset dispositions amid consolidation or regulatory pressure.
Founded in 1921, HomeStreet has $7.8 billion in assets and operates 56 branches across four western states. The announced merger with Mechanics Bank, expected to close in the third quarter, would combine the two institutions into a $23 billion bank with 168 branches.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
