Mr. Cooper Group Inc. and Sagent M&C, LLC, have reached an agreement to create what they say will be the mortgage industry’s first “cloud-native, homeowner-first” mortgage-servicing platform.
Under terms of the deal, Sagent will buy certain intellectual property rights related to Mr. Cooper’s proprietary, cloud-based technology platform for mortgage servicing, and Mr. Cooper will receive an equity stake in Sagent. Mr. Cooper also will become a multi-year customer of Sagent.
The agreement “will leverage Mr. Cooper’s mortgage-servicing depth and Sagent’s software innovation speed,” the companies said in a news release.
Sagent is a Warburg Pincus-backed fintech software company seeking to modernize servicing for America’s top banks and lenders. Company officials said Sagent will integrate Mr. Cooper’s platform “into a cloud-native core and license the resulting cloud-based servicing platform” to not only Mr. Cooper but other servicers, including Sagent’s large customer base of banks and independent mortgage companies.
Sagent will begin marketing the cloud-based servicing platform to other mortgage companies in 2023, it said.
“We believe Sagent’s shared vision, technology, and scale execution will help drive Mr. Cooper’s strategic growth by giving us the opportunity to bring our combined best-in-class servicing platforms to the industry, ultimately accelerating the future of mortgage servicing software and providing innovative solutions to mortgage servicers and their customers,” said Jay Bray, chairman & CEO of Mr. Cooper Group. “This agreement also provides us with meaningful efficiencies and allows us to accelerate our development of customer-facing applications that will delight our customers with personalized, friction-free solutions.”
Under the terms of the transaction, Mr. Cooper will receive a “meaningful minority equity stake” in Sagent, though the value of that stake was not disclosed. In addition, both Bray and Chris Marshall, vice chairman & president of Mr. Cooper Group, will join Sagent’s board of directors, and Sridhar Sharma, chief information officer of Mr. Cooper Group, will be appointed senior technology advisor to Sagent’s board.
Andrew Bon Salle, Sagent board member and former head of Single Family Business at Fannie Mae, praised the deal. “America’s mortgage servicers must be powered by nimble technology to be heroes to borrowers, stalwarts to investors, and stewards of consumer protection to regulators.” Bon Salle said. “I believe Mr. Cooper and Sagent are leading this charge in today’s market.”
Sagent CEO & President Dan Sogorka said the deal is a boost for both companies,
“Partnering with Mr. Cooper not only adds a top mortgage servicer with more than 3 million loans as a seven-year Sagent customer; it also lets Sagent innovate faster than ever for all Sagent customers to deliver simplicity homeowners expect without compromising on depth servicers require,” he said. “Sagent and Mr. Cooper share a vision of powering borrowers to manage their entire home and loan lifecycle from their mobile devices, and powering servicers to manage every single loan detail for consumers, regulators, investors, and partners. This shared vision will lead our entire industry into the future.”
Wachtell, Lipton, Rosen & Katz acted as legal advisor to Mr. Cooper Group. Kirkland & Ellis LLP acted as legal advisor to Sagent.
Mr. Cooper Group Inc. provides customer-centric 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.
