Velocity Financial has acquired Toorak Capital Partners in a deal valued at $3.2 billion. The transaction brings together Velocity Financial, a provider of real estate secured loans, with Toorak Capital Partners, an integrated correspondent lending platform that funds small balance business purpose residential, multifamily and mixed-use loans across the United States and the United Kingdom. Headquartered in Summit, N.J., Toorak Capital Partners acquires and manages loans directly from private lenders that originate high credit quality loans.
The acquisition expands Velocity Financial’s footprint into the small balance business purpose lending segment, a market Toorak Capital Partners has served through its correspondent model. Toorak Capital Partners’ principals bring deep expertise in mortgage credit, capital markets, securitization, asset-liability management, asset management and credit. Their background spans both residential and commercial real estate lending, which aligns with Velocity Financial’s existing focus on secured loan products. The combined platform is expected to broaden origination channels and enhance capital deployment capabilities.
Toorak Capital Partners-funded projects have renovated or stabilized housing for more than 9,000 families to date, an average of over 500 families each month. That operational track record will now sit within Velocity Financial’s larger balance sheet, allowing for more efficient funding of private lender partners. The deal also gives Velocity Financial access to Toorak Capital Partners’ established relationships with private lenders, which could support loan volume growth without requiring new infrastructure.
The transaction is structured as a full acquisition, with Toorak Capital Partners becoming part of Velocity Financial’s operations. No changes to Toorak Capital Partners’ day-to-day management were disclosed, and the company will continue to operate under its existing brand. The purchase price of $3.2 billion reflects the value of Toorak Capital Partners’ loan portfolio and its correspondent lending network.
The combined entity will focus on scaling small balance lending across both the U.S. and U.K. markets, leveraging Toorak Capital Partners’ credit expertise and Velocity Financial’s capital base. Integration efforts will center on aligning loan origination processes and risk management systems. The success of the acquisition will depend on how smoothly the two platforms merge their correspondent lending operations while maintaining the credit quality standards that have defined Toorak Capital Partners’ portfolio.