Information technology and consulting services provider Wipro (WIT) proved Monday the mortgage industry consolidation trend is not going away, announcing a $75 million agreement to acquire due diligence and risk management provider Opus CMC.
When annoucing the deal, the companies said it was designed to "strengthen Wipro’s mortgage solutions and outsourcing business” while complementing its current services on the mortgage originations, servicing and secondary markets side.
The deal mirrors prior transactions in the originations and servicing sectors as mortgage-related firms brace for new compliance standards, all the associated costs of tighter regulation and competition. With all of these factors in play, the need to partner up and provide new services is coming in loud and clear across the industry, and Wipro’s deal is just further proof of this.
What Wipro gains through Opus CMC is a platform well-versed in offering mortgage firms risk-management products. Not to mention the 490 employees in five centers spread across the country, with 315 of those staff members working as expert underwriters.
The Opus CMC acquisition brings loan-level due diligence expertise, valuation support, mortgage forensic analysis and complementary services into the Wipro fold. All classes of loans from home mortgages to commercial loans can be evaluated, with Wipro already serving global banks, mortgage investors, originators and conduits.
"We welcome Opus CMC’s employees to the Wipro family," said Manoj Punja, senior vice president and head of BPO with Wipro Limited. "This acquisition will help us expand in the high end Mortgage BPO segment, and brings differentiated capability with a platform-based risk management offering. Opus CMC has an experienced management team with a deep understanding of the emerging needs of this business."
Opus CMC co-founders Joseph Andrea and Jennifer LaBud, touched upon the gains for the firm in today's shifting market. They also suggest it's a valuable strategy to partner up, gaining a strategic footprint as risk management becomes a key part of the market for originators and investors alike.
"We are excited about the opportunity to join hands with Wipro and continue to be a dominant player in the industry with increased range and scale of offerings for our clients," Andrea and LaBud said. "Our industry is at a pivotal point with the introduction of new mortgage regulations driven by the CFPB (Consumer Financial Protection Bureau) and government agencies. Wipro and Opus CMC will jointly assist our clients in navigating this challenging and changing business environment and help build reliable outcomes in mortgage origination and secondary market operations."
The key gains for Wipro include its ability to manage risk and handle legacy mortgage books while dealing with new originations.