The mortgage servicer PennyMac Financial Services announced on Wednesday that it had entered into an agreement to acquire subservicing business Cenlar Capital Corporation in a deal valued at $257.5 million.
The merger, unveiled in a filing with the Securities and Exchange Commission, would expand PennyMac’s total portfolio to over $1 trillion in unpaid principal balance.
PennyMac will acquire Cenlar for $157.5 million in cash plus $85 million of contingent consideration payable over the next three years. Contingent consideration is a mechanism that sees companies pay additional funds as future milestones are achieved.
Cenlar would add $740 billion in unpaid principal balance to PennyMac, including 2 million loans from its servicing portfolio.
“We are thrilled to announce this transformative step in our company’s evolution, which is the culmination of a long and thoughtful process between our two organizations that began in the middle of last year,” PennyMac CEO David Spector said in a statement.
PennyMac said the merger was expected to close in the second half of this year. If that happens, PennyMac would be the second-largest mortgage servicer in the nation, Spector said.
“Leveraging industry-leading SSE technology, this further strengthens PennyMac’s position as a partner of choice for institutional subservicing and is expected to drive the growth of capital-light, fee-based revenue streams at significant scale,” Spector said.
PennyMac would acquire Cenlar’s subservicing business as a non-bank entity that focuses exclusively on mortgage subservicing.
PennyMac was founded in 2008 in the wake of the Great Financial Crisis. It employs approximately 4,900 people and originated $145 billion in new loans last year.
The Mortgage Bankers Association put PennyMac Financial Services within the top 15 lenders by total originations volume as of June 2025, with an estimated share of origination volume at 1.33 percent at the time.
That ranking found United Wholesale Mortgage was the largest originator at the time, with 8.61 percent of the total originations volume. Rocket Mortgage was No. 2 on the list with 5.57 percent.
