This week, Intercontinental Exchange (ICE) and Black Knight announced an agreement to sell Black Knight’s Empower loan origination system (LOS) business to Constellation Software, Inc. This all but confirms speculation from lenders that Empower wasn’t a major factor in the Black Knight transaction, and lenders on Empower risked a migration to Encompass, ICE’s mortgage software platform, if the deal had gone through as-is.
Toronto-based Constellation Software, while making strides in the past couple of years, has struggled to gain U.S. market share but appears to be putting together the pieces of a broader mortgage technology stack. The company:
Constellation’s message to market and market share growth with its loan origination systems has been inconsistent, and now it’s acquiring Empower. What’s the strategy here? There’s no need for multiple LOS solutions under one company; we know how that tends to work out.
Constellation will likely see some near-term pain supporting Empower and its new client base in terms of development, roadmap, customer support, and in-flight implementations. There could be both pros and cons for lenders impacted by this transaction.
On top of these developments, we’re also noticing:
Lenders impacted by this transaction need to make sure they fully understand:
Given the changing dynamics in the market and the ongoing vendor acquisitions, we’re seeing the window of viable options for mortgage lenders narrowing. One thing is certain as the vendor market continues to consolidate: lenders have fewer and fewer options as the door is pushed wide open for new entrants to make their way in.