IBM plans to market the offering through its IBM Lender Business Process Services subsidiary. The unit, created earlier this year, provides a range of technologies and back office services to mortgage providers and other lenders -- including automated loan processing, document generation, and third-party vendor management. It also offers variable cost services that are priced according to volume.

In a statement, IBM LBPS executive director Greg Sullins said such services can help mortgage providers maintain cost stability "in today's increasingly volatile market."

IBM said it expects the current credit crunch will lead more home buyers with shaky credit to federally insured loans now that many banks are dropping subprime and zero down payment direct mortgages.

IBM said it expects to have approval by year's end to offer mortgage origination services for federally backed mortgages in all states.

IBM's move into the mortgage services market is among the latest steps in CEO Sam Palmisano's campaign to transform the company from a simple hardware and software vendor into a provider of technology-driven business services. To that end, IBM under Palmisano has in recent years acquired several business service providers, including KeyMRO, Daksh eServices, and Schlumberger Business Continuity.