Coppell, Texas-based Mr. Cooper has announced that it is acquiring IBM's Seterus platform. The agreement worth $48 billion entails acquiring servicing rights underlying $24 billion in GSE mortgages and entering into a sub-servicing contract for an additional $24 billion in mortgages as well as the purchase of the platform.
“IBM acquired Seterus in the wake of the 2008 financial crisis to help a client manage a portfolio of distressed loans. We were successful in this mortgage servicing work and the portfolio is now much more stable. The time is now right to divest this business, which is no longer core to IBM’s portfolio, to a mortgage servicing specialist whose domain expertise and scale can further advance this business,” said Jay Bellissimo, General Manager, Cognitive Process Transformation, IBM Global Business Services.
Mr. Cooper expects to fund the acquisition with financing on the mortgage servicing rights and cash. Subject to regulatory approvals, the transaction is targeted to close in the first quarter of 2019.
“We are excited to welcome more than 300,000 customers and the Seterus team to the Mr. Cooper Group family. We are confident our new team will be energized by our people-first culture, and our new customers will benefit from our user-friendly mobile and online tools designed to help them manage their home finances,” said Jay Bray, Chairman, and CEO of Mr. Cooper Group Inc. “This transaction is consistent with our outlook for profitability targets and portfolio growth.”
Mr. Cooper provides servicing, origination, and transaction-based services related principally to single-family residences throughout the United States with operations under its primary brands: Mr. Cooper and Xome. Mr. Cooper is one of the largest home loan servicers in the country focused on delivering a variety of servicing and lending products, services, and technologies. Xome provides technology and data-enhanced solutions to homebuyers, home sellers, real estate agents, and mortgage companies.