Lender Processing Services, a recent spinoff from bank IT outsourcer Fidelity National Information Services, has landed a new multi-year consulting agreement with Wells Fargo Home Mortgage that should serve as a “critical piece” of the Wells/Wachovia merger expected to close this month.
As part of the deal, LPS evp Bob Caruso—who was formerly an svp at Wells in the bank’s Des Moines, IA-based mortgage unit—will lead business management and consulting services in helping Wells to manage the $118.7 billion worth of troubled pick-a-pay—or option-rate adjustable—loans coming over with Wachovia (via the latter’s 2006 acquisition of Golden West Financial).
One of LPS’ major initiatives is streamlining the loan-modification process for overwhelmed institutions, such as through its new RediMod system that automates workout strategies within risk and default calculations.
Wells had been one of the key holdouts against offering risky option ARMs originations before the merger, and is taking over a portfolio with projected losses exceeding $26 billion.
