March 17, 2023

FTC Opposes Merger of Nation’s Two Largest Mortgage Loan Origination Systems Providers

Lori Kalani, Bernard Nash

Cozen O'Connor

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Cozen O'Connor

The FTC issued a complaint against Intercontinental Exchange, Inc. and Black Knight, Inc., alleging that the proposed merger of the nation’s two largest providers of home mortgage loan origination systems (LOS) would violate the FTC Act and the Clayton Act.
According to the complaint, the merger would allow the companies to raise costs for lenders using LOS – software that manages documents and workflow during the mortgage generation process. The FTC alleges these increased costs would then be passed on to homebuyers and impact other ancillary mortgage services, such as product pricing and eligibility engines, which lenders use to obtain competitive interest rates for homebuyers.
Should the FTC determine that the merger would result in violations of the FTC Act or the Clayton Act, the FTC may order relief including divestiture, a ban on transactions between the two companies that combine their businesses in the relevant markets, an obligation for the companies to notify the FTC of any proposed acquisitions or mergers in pertinent markets, and ongoing compliance monitoring.

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