azimmardi@imfpubs.com

Velocity Financial announced a definitive agreement Thursday to acquire Toorak Capital, a business-purpose lending and asset management platform. The transaction is expected to close in the fourth quarter of 2026.

Chris Farrar, CEO of Velocity, said on a webcast that the deal will increase Velocity’s origination volume by more than 75% and add almost 40% to Velocity’s servicing portfolio.

The transaction will be a 100% cash purchase of Toorak’s operating platform, including its direct origination business in the U.S., as well as its lending operations in the U.S. and throughout the United Kingdom.

Toorak entered into separate agreements with a third-party investment firm for the purchase of the lender’s existing portfolio of BPL loans, which totals $3 billion in unpaid principal balance. Velocity will also enter into an agreement with the third-party investment firm to manage the portfolio acquired from Toorak, as well as agreements to sell future Toorak loan production to the third-party firm.

The total value of the platform and portfolio transactions is estimated at $3.2 billion based on Toorak’s consolidated balance sheet as of June 30, 2026.

For more details on the acquisition, see this week’s Inside Nonconforming Markets, online Friday afternoon.