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Law Firm Acquisition First Sign of Changes in Default Servicing?

In a move that could signal a sea change in the industry, mortgage banking law firm Butler & Hosch recently announced that it would acquire Atlanta-based McCurdy & Candler's default practice.

McCurdy & Candler regard the move as a strategic alignment that will allow them to continue to service clients with whom they have well-established relationships.

"We are looking forward to the strategic partnership with Butler & Hosch and the operational support that a national platform will provide to our organization," said Sid Gelernter, managing partner of McCurdy & Candler.

Housing industry analysts anticipate that more acquisitions of this nature will occur as the foreclosure market stabilizes.

"We will continue to see a lot of consolidation in the default space, especially through mergers and acquisitions, or some companies will just shut down," said Rick Sharga, EVP for Auction.com. "The unfortunate reality for companies that are dependent on REO inventory for their livelihoods is that we won't see an influx of inventory coming back in to the industry."

Companies looking to remain viable in the default servicing industry need to begin to reinvent themselves, Sharga says. He's noticed that some companies are moving upstream and providing their services in the earlier stages of default to survive.

"The ones that can only do REO work are, unfortunately, looking definitively at an end to their business," Sharga said.

Companies looking to expand their footprint may soon find ample opportunities to do so, he continued.

The Dallas-based Butler & Hosch has been quickly expanding its presence across the country. Last year, the company also acquired Cal-Western Reconveyance, a well-established trustee company.

With the McCurdy & Candler acquisition, Butler & Hosch will increase its presence in Georgia and add Tennessee to its footprint. Currently, the firm operates in nine states.

Bob Hosch, managing partner at the law firm said that clients would not be affected by the acquisition. McCurdy & Candler senior leaders Deborah Cheek, Sid Gelernter, and Michael Dugan will continue to manage all legal and compliance operations post-acquisition.

While terms of the deal were not disclosed, sources confirmed that the deal is in its final stages with both companies completing the due diligence process. The acquisition will be completed by the end of the month.

McCurdy & Candler is authorized by both Freddie Mac and Fannie Mae to perform default services in Tennessee and Georgia and will continue to perform default services in those states under the new partnership. McCurdy & Candler's general practice will not be affected by the move and will continue practice and operations in Decatur, Georgia.

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About Author: Ashley Harris

Ashley R. Harris is the Editor-in-Chief for MReport and TheMReport.com and the acting Editor-in-Chief of DS News and DSNews.com. Ashley has years of experience as a financial writer having worked at The Houston Chronicle and Newsweek. She received her B.S. in journalism from the University of Houston and her M.S. in journalism from Columbia University School of Journalism.

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