In a significant shake-up to the mortgage subservicing landscape, PennyMac Financial Services — which goes by Pennymac for short — announced Wednesday it has agreed to acquire the subservicing business of Cenlar Capital Corp. for an upfront purchase price of $172.5 million and up to $85 million of contingent consideration payable over three years.

Cenlar Capital is the parent company of Cenlar FSB, one of the largest mortgage subservicers in the U.S. If the transaction receives regulatory approval and meets other closing conditions, Pennymac would become the second-largest mortgage servicer overall, according to a press release from the California-based mortgage lender and servicer.

David Spector, chairman and CEO of Pennymac, noted in the press release that acquisition talks between the two companies began in mid-2025.

“Having worked closely with the Cenlar team, we have reached an agreement that represents a compelling value proposition for our stockholders, Cenlar’s institutional clients and their clients’ borrowers, as well as the many talented professionals joining Pennymac,” Spector stated.

The Pennymac leader added that the move “aligns with our previously communicated strategic objective to expand our subservicing business,” noting that “servicing has always been a core competency of Pennymac’s balanced business model.”

The potential $257.5 million Pennymac-Cenlar transaction continues a broader diversification trend among major mortgage lenders into the servicing space.

In October, Rocket Companies completed its $14.2 billion acquisition of Mr. Cooper Group, adding a formidable loan servicing punch to pair with lending subsidiary Rocket Mortgage.

In April of last year, United Wholesale Mortgage (UWM) announced it was bringing servicing in-house through an agreement with ICE Mortgage Technology. Then, in December, UWM redoubled its servicing push when it agreed to acquire the parent company of RoundPoint Mortgage Servicing in an all-stock transaction valued at $1.3 billion.

According to Pennymac, the Cenlar transaction is expected to add 2 million loans and up to $740 billion in unpaid principal balance (UPB) of mortgage loan subservicing to its portfolio, which would bring its total servicing portfolio to over $1 trillion in UPB.  

The transaction is expected to close in the second half of 2026, per the press release.