After selling Lotus Notes, Domino and Tivoli software assets for $1.8 billion, IBM has now sold another one of its business units – the Seterus mortgage servicing platform.
These moves come as IBM CEO Ginni Rometty is on a mission to shed the company’s non-core assets and is seeking ways to accelerate the company’s security, cloud, cognitive computing and mobile businesses, among other strategic focus areas.
In light of this, Mr. Cooper Group has announced that it has signed a definitive agreement to acquire the servicing rights underlying $24 billion in GSE mortgages, enter into a subservicing contract for an additional $24 billion in mortgages, and purchase the Seterus mortgage servicing platform and assume certain assets related thereto from IBM.
Mr. Cooper is one of America’s largest home loan servicers focused on delivering a variety of servicing and lending products, services and technologies.
“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. “This transaction is consistent with our outlook for profitability targets and portfolio growth.”
“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 Group expects to finance the acquisition with the financing on the mortgage servicing rights and cash. Subject to regulatory approvals, the transaction is targeted to close in the first quarter of 2019.