FTC to Dispute ICE/Black Knight’s $13 Billion Mortgage Deal
The Federal Trade Commission is expected to sue Intercontinental Exchange Inc. as early as Thursday over its proposed $13.1 billion acquisition of mortgage software competitor Black Knight Inc., according to two people familiar with the matter.
The FTC is expected to challenge the deal over concerns that it would create a near-monopoly in the lending software market and give a single company control of many of the tools lenders use to write or issue home mortgages refinance, people say. who spoke anonymously to discuss an ongoing investigation.
Exchange operator ICE owns mortgage software company Ellie Mae Inc., whose Encompass platform is the most widely used for lending. Black Knight’s Empower is the second largest player in this market. ICE also owns the Mortgage Electronic Registration Systems, or MERS, the national database that tracks mortgage servicing rights, while Black Knights MSP is the largest mortgage servicing platform, controlling about 56% of the market.
The companies said the deal would create a platform to help lenders through all stages of a mortgage, from a customer’s initial home search to loan servicing to a potential default.
Deal opponents have claimed the merged company would have incentive to bundle all of its services and shut out competitors that only offer software for part of the mortgage workflow. The Community Home Lenders of America, which represents smaller lenders, and Representative Maxine Waters of California, the top Democrat on the House Financial Services Committee, both expressed concern about the merger because the cost of servicing mortgages or lending to homebuyers is likely to increase passed on.
The mortgage software merger would be the 11th transaction to be challenged by the FTC since Chairwoman Lina Khan took over as the antitrust agency’s leadership in June 2021. Khan has urged the agency to take a more aggressive stance on mergers, particularly in the rapidly evolving tech markets. Data is a key element.
The FTC declined to comment. Black Knight and ICE did not immediately respond to a request for comment.
Politico previously reported that the FTC was preparing a lawsuit.
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