Swiss bank UBS Group AG has decided to sell Credit Suisse’s mortgage servicing company, Select Portfolio Servicing (SPS), to a group of investors led by Sixth Street, HousingWire has learned. Investment firm Davidson Kempner Capital Management is a co-investor.
Representatives at Credit Suisse, Davidson Kempner and Sixth Street declined to comment. Bloomberg first reported on the buyers’ names based on anonymous sources.
Sources told HousingWire that Salt Lake City-based SPS is a well-established mortgage servicing company, but Credit Suisse has been trying to sell it for a while. Banks have reduced their exposure to mortgage servicing rights (MSRs) due to expected higher capital requirements and risks. Wells Fargo is one example.
On Wednesday, executives at UBS — which acquired Credit Suisse Group in June 2023 and became the ultimate parent company of SPS — reported the sale of the U.S. servicing business without naming the buyers or disclosing the financial details.
In a call with analysts, UBS chief financial officer Todd Tuckner said the deal, expected to close in the first quarter of 2025, benefits the bank by reducing $250 million in annualized costs and lowering risk-weighted assets by $1.3 billion. CEO Sergio Ermotti added on a media call that a “consortium” acquired the business. Reuters first reported on the transaction.
Fitch Ratings said in a report that SPS has been servicing residential mortgages since 1989 and residential mortgage-backed securities (RMBS) transactions since 2000. Credit Suisse acquired SPS in 2005 but was rescued by UBS last year. The Swiss bank added SPS to its division that is focused on non-core and legacy businesses.
According to Inside Mortgage Finance (IMF), SPS was the 20th-largest U.S. primary mortgage servicer at the end of June, handling $166.7 billion in unpaid principal balance (UPB). Meanwhile, the company’s owned servicing portfolio was valued at $45 billion at the end of June, good for No. 36 in the IMF ranking.
SPS announced a deal in September 2022 to acquire some of the assets of Texas-based Rushmore Loan Management Services. With Rushmore as a subsidiary, SPS was set to employ more than 1,600 workers to service roughly 1.4 million loans, the companies said in an announcement of the deal.
