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4 min read

ICE, Black Knight Selling Empower to Constellation Software: So What?

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Mortgage lenders may be losing control of their LOS options

This week, Intercontinental Exchange (ICE) and Black Knight announced an agreement to sell Black Knight’s Empower loan origination system (LOS) business to Constellation Software, Inc. This all but confirms speculation from lenders that Empower wasn’t a major factor in the Black Knight transaction, and lenders on Empower risked a migration to Encompass, ICE’s mortgage software platform if the deal had gone through as-is.

Toronto-based Constellation Software, while making strides in the past couple of years, has struggled to gain U.S. market share but appears to be putting together the pieces of a broader mortgage technology stack. The company:

  • Acquired Mortgage Builder in 2019, which negatively affected development and service
  • Acquired ReverseVision in February 2022
  • Launched NOVA, a new mortgage LOS, in September 2022
  • Rebranded its LOS Mortgage Builder to Constellation Mortgage in April of last year

Constellation’s message to market and market share growth with its loan origination systems has been inconsistent, and now it’s acquiring Empower. What’s the strategy here? There’s no need for multiple LOS solutions under one company; we know how that tends to work out.

What Will Happen with Both Loan Origination Systems?

Constellation will likely see some near-term pain supporting Empower and its new client base in terms of development, roadmap, customer support, and in-flight implementations. There could be both pros and cons for lenders impacted by this transaction.

  • While Black Knight (Empower) has historically courted large mortgage lenders, it has had more success in the mid-market space in recent years, signing mid-tier banks and credit unions. Any lender that recently migrated to Empower will now have to go with a different company than it originally selected after having taken a risk with Black Knight supporting its strategic shift down-market.
  • Encompass wasn’t/isn’t going anywhere, so lenders were potentially in a situation of having to migrate from Empower to Encompass had the merger gone through. But, with the acquisition of Empower by Constellation, these lenders will likely be able to stay on the Empower platform even though it will now be supported by a completely different company.
  • Black Knight’s acquisition of Optimal Blue in late 2020 put both solutions under one roof and was a compelling driver for some of Empower’s recent wins in the mid-market space. Now, these solutions will again be owned by different companies. A key thing for lenders to watch will be the relationship and functionality between Empower and previously Black Knight-owned ancillary solutions such as Optimal Blue not included in this transaction.  
  • Lenders currently evaluating potential LOS replacement solutions and/or existing Empower and Encompass clients now have some peace of mind that the two solutions will remain separate.
  • Recent acquisitions of OpenClose by MeridianLink and Roostify by CoreLogic and, in late 2021, SimpleNexus by nCino have created a much more consolidated vendor market than what lenders were dealing with several years ago. The move to spin off Empower to Constellation should help keep the mortgage vendor market from thinning out more than it already has.


On top of these developments, we’re also noticing:

  • A pullback in interest by small-to-midsize lenders from standalone, dedicated mortgage point-of-sale (POS) solutions like Blend, which has laid off a significant portion of its workforce over the past year. At one point, POS vendors had a huge advantage in the market, but that advantage has waned as LOS providers beefed up their POS capabilities, narrowing the performance gap at a significantly lower price point and simplified technology stack – the latter being one of the more important components as robust integrations between POS and LOS providers have proven problematic.
  • Ongoing corporate issues surrounding Mortgage Cadence and Mortgagebot continue to drive dissatisfied lenders to seek out alternate solutions for their overall mortgage technology stack.   
What Lenders Need to Know

Lenders impacted by this transaction need to make sure they fully understand:

  • The implications across the spectrum of personnel, resources, and technology
  • The potential changes in customer support and implementation resources and how this ownership change will affect their technology roadmap and ability to deliver enhancements as planned
  • Any potential impact to changes in ancillary solutions that will remain with Black Knight but are important components of the overall solution set with Empower 

Given the changing dynamics in the market and the ongoing vendor acquisitions, we’re seeing the window of viable options for mortgage lenders narrowing. One thing is certain as the vendor market continues to consolidate: lenders have fewer and fewer options as the door is pushed wide open for new entrants to make their way in.

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