The changing default servicing landscape remains a catalyst for strategic mergers and acquisitions, prompting creditor’s rights law firm ALAW to buy JPMorgan (JPM) Chase’s California Reconveyance Co. in a strategic deal that takes effect Monday.
With the purchase of California Reconveyance assets, ALAW – a firm with existing default law operations in Florida and Georgia – expands its footprint to California and Arizona while simultaneously gaining JPM’s robust trustee operation in Chatworth, Calif.
The acquisition comes with 80 CRC employees - including legal staff with experienced attorneys who are able to fulfill new GSE requirements - allowing ALAW to stay on top of all regulatory changes while expanding its GSE business, the firm said Monday.
"What you are seeing is a switch to national vendors and providers here," said Rayman Mathoda, chief revenue officer at ALAW.
Mathoda added that clients are looking for firms with a national scope that can ensure regulatory compliance across the board, getting the job done in a way that makes the consumer and banks confident in the work.
The law firm’s founding partner and CEO James Albertelli added, "The acquisition of CRC plays a substantial part in our long-term goal. And our long-term goal is to expand our breadth and depth of services across the country as the big banks reduce their internal staff and move to fewer vendors."
This is all part of the changing landscape, where banks have to be knowledgeable and cognizant at all times about the work of outside vendors and legal services providers. Creating a one-stop shop with a national scope – and now a prominent California trustee operation – puts ALAW right where it wants to be in this environment.
It also keeps 80 of JPM’s employees at work, allowing them to contribute their expertise to the growing firm.
"This is a great opportunity to take care of our employees and offer their value and experience to a company that’s expanding their business to California," said Amy Bonitatibus, Chase spokeswoman.
ALAW was founded by Albertelli back in 1997 as Albertelli Law before changing its name.
Consolidation on the servicing side of the market was accurately predicted by Fitch, which released a report more than a year ago, suggesting that new servicing rules and the Consumer Financial Protection Bureau would drive market consolidation as firms on the servicing side aim to stay competitive in the midst of growing compliance costs.