Mortgage servicer Mr. Cooper Group announced the acquisition of IBM’s Seterus mortgage servicing platform, in a deal that expands Mr. Cooper’s portfolio with the addition of the servicing rights for $24 billion in GSE mortgages and a subservicing contract for an additional $24 billion in mortgages.
“We are excited to welcome more than 300,000 customers and the Seterus team to the Mr. Cooper Group family,” said Jay Bray, chairman and CEO of Mr. Cooper Group. “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. This transaction is consistent with our outlook for profitability targets and portfolio growth.”
Mr. Cooper expects to fund the acquisition with financing on the mortgage servicing rights and cash. The deal is targeted to close in the first quarter 2019, subject to appropriate regulatory approvals.
“IBM acquired Seterus in the wake of the 2008 financial crisis to help a client manage a portfolio of distressed loans,” said Jay Bellissimo, general manager of cognitive process transformation at IBM Global Business Services. “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.”