IBM Sells Mortgage Servicing Division to Mr. Cooper Group
IBM has sold its Seterus mortgage servicing platform to Mr. Cooper Group Inc. The move comes as IBM CEO Ginni Rometty strives to shed non-core assets, while seeking ways to accelerate the company’s security, cloud, cognitive computing and mobile businesses, among other strategic focus areas.
IBM formed Lender Business Process Services (LBPS) in 2007 and rebranded its as Seterus in 2011 after making certain acquisitions. The LBPS mission, IBM said at the time, was to “enable mortgage lenders to replace the fixed costs associated with typical loan fulfillment operations with a variable cost framework, freeing up lenders to focus more on providing better personal service and support to consumers.”
Still, the Seterus business has faced controversy and layoffs in recent years. Rumors about a potential asset sale have surfaced multiple times.
In a prepared statement about the deal today, Mr. Cooper Group CEO Jay Bray said:
“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. This transaction is consistent with our outlook for profitability targets and portfolio growth.”
The deal comes only a few days after IBM sold certain Lotus Notes, Domino and Tivoli software assets for $1.8 billion.
IBM Business Evolution
IBM continues to promote its multi-cloud and hybrid-cloud offerings as wiser alternatives to Amazon Web Services (AWS) and Microsoft Azure. Moreover, IBM is paying $34 billion to acquire Red Hat for various Linux, storage, virtualization and cloud software tools. But Red Hat’s most recent financial results were a bit weaker than Wall Street expected, and IBM’s own business remains under pressure.