First American Acquires Burrow Closing Management Corporation's REO Segment
June 22, 2004
Acquisition of 'Real Estate Owned' Business Augments First American's Default Title Operations
SANTA ANA, Calif., /PRNewswire-FirstCall/ -- The First American Corporation (NYSE: FAF) has acquired the Real Estate Owned (REO) segment of Burrow Closing Management Corporation (BCMC), a title ordering, clearing and settlement provider. All other, non-REO segments of BCMC will continue to operate under the BCMC name as part of Cendant Settlement Services Group, Inc., an indirect subsidiary of Cendant Corporation (NYSE: CD - News). Terms of the transaction, which closed June 18, 2004, were not disclosed.
Formed in 1994, BCMC is a leading provider of REO services to mortgage lenders and asset management companies. REO properties are real estate acquired through foreclosure and held in inventory. Major lenders generally outsource the handling of foreclosure settlement -- including title clearance and placement of title orders -- to service providers such as BCMC. BCMC currently provides these services to two of the top ten mortgage lenders in the U.S.
"Competition in the REO industry is fragmented and localized, and few companies have the size or broad geographic reach of BCMC REO," said Dennis J. Gilmore, executive vice president and head of National Default Title Services for The First American Corporation. "This acquisition brings an existing team of highly experienced REO specialists to First American, further enabling us to provide the most comprehensive array of default services available to mortgage lenders today."
The acquired entity will be organized as a new, wholly owned First American subsidiary named National Default REO Services, LLC. The company will conduct business under the name Burrow REO. Scott Brooks, who has managed the business since its inception, has joined First American and will serve as chief executive officer of Burrow REO. Approximately 50 on-staff REO professionals, currently located in Mission Viejo, Calif., will be retained by First American and transferred to First American's Santa Ana, Calif., headquarters in coming months.
First American has bolstered its default and foreclosure-related business lines through key acquisitions in 2004, including the previously announced purchases of default claims management company Baker, Brinkley & Pierce and default services provider SNK/LOGS Financial Services.
Source: The First American Corporation