The First American Corp. has beefed up its real estate default operations with the purchase of the Real Estate Owned (REO) segment of Burrow Closing Management Corp., a title ordering, clearing and settlement provider.
The acquisition comes one week after the company bought mortgage default services provider SNK Holdings to create First American National Default Outsourcing, a growing component of First American’s Mortgage Information Services group.
Terms of the BCMC transaction were not disclosed.
All other, non-REO segments of BCMC will continue to operate under the BCMC name as part of Cendant Settlement Services Group, an indirect subsidiary of Cendant Corp.
REO properties are real estate acquired through foreclosure and held in inventory. Large lenders usually 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, according to First American.
“Competition in the REO industry is fragmented and localized, and few companies have the size or broad geographic reach of BCMC REO,” said Dennis Gilmore, EVP of National Default Title Services for First American.
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.
“The continued development of our default operations is vital to our strategy of being a full-service resource to large lender customers,” said First American CEO Parker Kennedy.
First American’s primary business segments include title insurance and services, specialty insurance, trust and other services, mortgage information, property information, credit information and screening information.
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