Assurant is to sell its mortgage solutions business to Xome Holdings for US$35 million in cash and potential future payments, it has been revealed today.
The global provider of risk management solutions closed the sale, which encompasses all of the mortgage solutions business including title, valuations, mortgage technology and field services, on Wednesday.
Xome Holdings, an indirect wholly-owned subsidiary of WMIH Corp, will take on nearly all of the business’s current employees. Texas-based Xome is a provider of technology and data-led solutions for homebuyers, home sellers, real estate agents and companies engaged in the origination and/or servicing of mortgage loans.
“Successful execution of our profitable growth strategy requires us to align resources with our best opportunities,” said Michael Campbell, president of Assurant Global Home, in a statement.
“Our sale of the mortgage solutions business is driven by our ongoing desire to focus on lines of business where we have leadership positions, as well as to strengthen our offerings and capabilities in lender-placed homeowners’ insurance, multifamily housing, and the connected home. Assurant will work closely with Xome to ensure a smooth transition of the business for its clients, employees and business partners.”
Campbell said the mortgage business had gone through a transformation in both processes and technology in recent years.
“The acquisition by Xome is a natural fit for the mortgage solutions product portfolio and will give the business the scale it needs to reap the benefits of those investments,” he said.
Assurant said that second quarter 2018 net operating income for global housing will include the operating results of the mortgage solutions arm, but given the disposition the associated assets and liabilities will be held for sale – which is expected to result in an estimated net loss of US$34 million reflected in consolidated net income.
Barclays Capital served as financial advisor to Assurant on the transaction.