IBM is getting into the mortgage lending software and services business just as Fair Isaac Corp. is leaving.
IBM this week announced the formation of a new business unit, IBM Lender Business Process Services Inc., which will specialize in mortgage origination services.
In an unrelated development, Fair Isaac Corp. said it would sell its mortgage software division to ISGN, the Indian-based parent company of MortgageHub Inc., which plans to “significantly expand” its U.S. operations.
Chennai-based ISGN said it was acquiring Fair Isaac’s mortgage software division staff, technology and an operations center. MortgageHub will integrate Fair Isaac products including the Diamond loan origination solution, the BridgeLink e-Services network, the LSAMS servicing system, the TCL construction lending system, the FORTRACS default management system and the LenStar default communications network.
The BridgeLink network gives MortgageHub 150 new customers and 700 vendor partners. ISGN said it would offer jobs to the 61 employees of Fair Isaac’s Norcross, Ga.-based mortgage software division.
Fair Isaac’s mortgage banking division was established in 2004, when the company acquired London Bridge Software Holdings PLC.
In a statement, Fair Isaac Chief Executive Officer Mark Greene said Fair Isaac had determined that “certain aspects” of the company’s mortgage industry business no longer fit Fair Isaac’s long-term strategy, but that the company will continue to offer FICO scores, custom analytics, marketing services and other decision management technologies to mortgage lenders.
As Fair Isaac gets out of the mortgage software business, IBM announced the creation of LBPS Inc., a wholly owned subsidiary that will offer a range of automated lending services, including loan application, underwriting, processing, vendor management, document preparation and closing.
LBPS will help lenders tailor loans to their customers’ individual needs, ensure loans are correctly priced, include only the appropriate fees, and generate all required documents and fund loans in a timely manner, the company said.
IBM said Charlotte, N.C.-based LBPS will provide services not only to top-tier lenders, but that a “variable cost” framework will allow small and mid-size companies to take advantage of the company’s technology and services.
Those include standards-based platforms such as FileNet, Palisades Technology Partner’s Impact Loan Origination suite, and automated and digitized processes that allow parties to the transaction to act in real time. Digitization of key data will allow for greater underwriting vigilance and higher quality, helping loans qualify for resale in the secondary market while boosting profitability and improving customer satisfaction, the company said.
“By integrating fulfillment and imaging technologies, proven processes and highly experienced lending professionals, we will deliver the automation and digitization necessary to help achieve the loan fulfillment efficiencies and service required for success,” Af Assur, general manager, IBM Mortgage Origination, said in a statement.