UBS announces agreement to sell US mortgage division

UBS Group has found a buyer for its acquired Select Portfolio Servicing unit when it bought the troubled Credit Suisse last yeara senior executive told analysts during a conference call on quarterly results.

“We have agreed to sell Credit Suisse’s U.S. mortgage business,” Chief Financial Officer Todd Tuckner said on Wednesday, noting that the transaction will reduce UBS’s risk-weighted assets by about $1.3 billion and cut annual costs by $250 million.

UBS did not disclose further terms of the transaction or a specific buyer, but Reuters, which already reported on the salesaid CEO Sergio Ermotti revealed in a subsequent media conference that a “consortium” was involved in the purchase.

The sale, which Tuckner said is expected to close in the first quarter of next year, could partially resolve the uncertainty surrounding UBS’s involvement in the U.S. mortgage loans it took over from crisis-hit Credit Suisse.

Credit Suisse bought SPS in 2005 At the time, the company played an influential role in the mortgage-backed securities boom in the United States that preceded the collapse of the housing market during the Great Recession.

SPS continues to serve as a servicer in what is now the much smaller private RMBS market. It has also serviced some loans in the larger government market, including a recent sale of a Freddie Mac reperforming loan. It has also a business partnership with CoreLogic last year in the areas of tax, flood and portfolio monitoring.

The U.S. mortgage servicer is also known for developing channel-agnostic, proprietary technology to manage loans, according to a Fitch Ratings report published in December. Its platform includes a range of automation capabilities, including telephony, web, SMS and mobile technology.