Fay Group acquires VanDyk Mortgage to expand conforming lending and MSR business

What happened

Fay Group has acquired VanDyk Mortgage Corp. to broaden its presence in conforming mortgages and mortgage servicing rights, or MSRs. The companies announced the deal on Friday and did not disclose its financial terms.

Fay said the acquisition gives it access to VanDyk’s Fannie Mae, Freddie Mac and Ginnie Mae capabilities. It also brings together VanDyk’s servicing team, its existing MSR book and its ability to create MSRs through conforming-loan production. Fay described those operations as complementary to its business.

VanDyk founder Tom VanDyk characterized the sale as a move to another founder-led company. He said he viewed Fay Group, led by Ed Fay, as an appropriate next platform for VanDyk and expressed confidence that its employees would be cared for.

The key details

VanDyk is based in Michigan and draws most of its business from Florida, Michigan and North Carolina. The report cited its mortgage-originations totals for the current year to date and for each of the prior two calendar years, with reported production rising in the more recent full year compared with the preceding one.

The Nationwide Multistate Licensing System listed VanDyk as having sponsored loan officers and active branches as of the announcement. That listing provides a contemporaneous view of the lender’s licensed distribution network, while the reported production figures describe the scale of its recent origination activity.

Fay Servicing, Fay Group’s servicing arm, has focused on subservicing Federal Housing Administration loans and on managing distressed, at-risk and nonconventional residential and business-purpose assets. The report said it has done so for more than a decade. VanDyk’s conforming production and MSR-creation capacity add a channel connected to more traditional, agency-eligible products.

Mortgage Scoop first reported the transaction, according to the report.

Why it matters

Fay presented the transaction as a way to expand in the conforming mortgage market through VanDyk’s agency capabilities. The combination pairs Fay’s established servicing focus with a lender that originates loans eligible for the agency channels identified by the companies.

The report framed the deal as illustrating two lender and servicer priorities: building scale in conforming production and MSR creation, and using mergers and acquisitions to balance specialty-servicing exposure with agency portfolios. Those are the strategic objectives attributed to the transaction in the source, rather than disclosed operating changes at VanDyk.

The acquisition also follows the conclusion of a prior Consumer Financial Protection Bureau action involving Fay Servicing. In a prior July, the CFPB terminated a consent order concerning illegal foreclosure practices after the company paid restitution to affected consumers and a civil money penalty, according to the report.

What to watch

The companies have not provided an integration timetable or described how VanDyk’s branches, sponsored loan officers, servicing personnel or agency-production operations will be incorporated into Fay Group. They also have not detailed the transaction’s financial terms.

Future company disclosures could address whether VanDyk will continue under its current brand, how its branch network will operate, and whether its emphasis in Florida, Michigan and North Carolina changes. Further information could also clarify how the MSR book and newly created MSRs are handled after the acquisition.