First American Acquires Burrow Closing Management Corporation’s REO Segment
— Acquisition of ‘Real Estate Owned’ Business Augments First American’s Default Title Operations —
June 22, 2004, SANTA ANA, Calif.
The First American Corporation (NYSE: FAF), the nation’s largest data provider, today announced it has acquired the Real Estate Owned (REO) segment of Burrow Closing Management Corporation (BCMC), a premier 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). 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.
“The continued development of our default operations is vital to our strategy of being a full-service resource to large lender customers,” said Parker S. Kennedy, president and chief executive officer of The First American Corporation. “First American is prepared to meet our customers’ needs at any phase of the real estate cycle, and therefore generate strong revenues in varying market conditions.”
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.
About The First American Corporation
The First American Corporation is a Fortune 500 company that traces its history to 1889. As the nation’s largest data provider, the company supplies businesses and consumers with information resources in connection with the major economic events of people’s lives, such as getting a job; renting an apartment; buying a car, house, boat or airplane; securing a mortgage; opening or buying a business; and planning for retirement. The First American Family of Companies, many of which command leading market share positions in their respective industries, operate within six primary business segments including: Title Insurance and Services, Specialty Insurance, Mortgage Information, Property Information, Credit Information and Screening Information. With revenues of $6.21 billion in 2003, First American has 29,000 employees in approximately 1,800 offices throughout the United States and abroad. More information about the company and an archive of its press releases can be found at www.firstam.com.