Item 1.01 Entry into a Material Definitive Agreement
June 30, 2014, HomeStreet Bank(the "Bank") a wholly owned subsidiary of HomeStreet, Inc.(the "Company") sold servicing rights relating to single family mortgage loans serviced for the Federal National Mortgage Association ("Fannie Mae") with an aggregate unpaid principle balance of approximately $3 billion(the "Servicing Rights") to SunTrust Mortgage, Inc.("SunTrust") pursuant to a Servicing Rights Purchase and Sale Agreement between the Bank and SunTrust dated June 30, 2014(the "Sale Agreement"). The sale represents approximately 25% percent of the Bank's total single family mortgage servicing portfolio as of March 31, 2014and is expected to result in a net gain of approximately $4.7 millionin mortgage servicing income for the quarter ending June 30, 2014. Fannie Mae has consented to the transfer of the Servicing Rights pursuant to the Sale Agreement. Pursuant to the Sale Agreement, a preponderance of the purchase price was paid on June 30, 2014, and the remainder will be released as SunTrust receives completed loan and servicing files and completes its review of the loan files relating to the Servicing Rights. SunTrust has agreed to reimburse the Bank for all documented advances of principal, interest, taxes, insurance and corporate expenses made by the Bank in accordance with Fannie Mae guidelines. While all legal right, title and interest in and to the Servicing Rights was transferred to SunTrust on June 30, 2014, the final physical transfer of the Servicing Rights is expected to occur on October 1, 2014. The Bank will continue to service the loans in the portfolio underlying the Servicing Rights on behalf of SunTrust from June 30, 2014until the physical transfer of the Servicing Rights to SunTrust is completed. A copy of the Sale Agreement is attached as Exhibit 10.1. The foregoing description of the Sale Agreement does not purport to be complete and is qualified in its entirety by reference to the Sale Agreement. The Sale Agreement and description of the Sale Agreement set forth above have been included to provide investors and security holders with information regarding the terms of the Sale Agreement, and is not intended to provide any other factual information about the Company, the Bank, SunTrust or their respective subsidiaries or affiliates. The representations and warranties contained in the Sale Agreement were made only for purposes of that agreement and as of specific dates; were solely for the benefit of the parties to the Sale Agreement, may be subject to a contractual standard of materiality different from what might be viewed as material to shareholders, and may be subject to limitations agreed upon by the parties, including being qualified by confidential disclosures made by the parties to each other. Investors should not rely on the representations and warranties as characterizations of the actual state of facts or condition of the Company, the Bank, SunTrust or any of their respective subsidiaries, affiliates or businesses.
This current report and the furnished press release included as an exhibit to this Current Report each contains forward-looking statements regarding the Company's current expectations. Forward-looking statements are all statements other than historical facts. Such statements speak only as of the date of the press release and are subject to a variety of risks and uncertainties, many of which are beyond the Company's control, which could cause actual results to differ materially from the expectations. These risks and uncertainties include, in addition to those discussed herein, all of the factors discussed in the Company's Annual Report on Form 10-K for the year ended