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50 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 it would acquire Atlanta- based McCurdy & Candler's default practice. McCurdy & Candler regarded the move as a strategic alignment that will allow it to continue to service clients with whom it has well-estab- lished relationships. "We are looking forward to the strategic partnership with Butler & Hosch and the op- erational 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 consolida- tion in the default space, especially through mergers and acquisitions, or some companies will just shut down," said Rick Sharga, EVP for Auction.com. "e unfortunate reality for com- panies 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 said. He's noticed that some companies are moving upstream and providing their services in the earlier stages of default to survive. "e ones that can only do REO work are, unfortunately, looking definitively at an end to their business," Sharga said. Companies looking to expand their foot- print may soon find ample opportunities to do so, he continued. e Dallas-based Butler & Hosch has quickly expanded its presence across the coun- try. 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. 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 Mi- chael 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. e 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 de- fault 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. ANOTHER MAN SENTENCED IN FLORIDA WIRE FRAUD SCHEME A Florida man was sentenced in February to serve 12 months and one day in prison for defrauding thousands of homeowners in a $4 million nationwide home loan modification scheme. Vernell Burris Jr. was sentenced to prison along with two other previously sentenced co- defendants, Christopher Godfrey and Dennis Fischer, in a continuing SIGTARP case. Burris pleaded guilty on November 28, 2012, to one count of conspiracy and to nine counts of wire fraud. e announcement came from the office of Special Inspector General for the Trouble Asset Relief Program (SIGTARP), Christy Romero. Burris worked alongside Godfrey and Fischer operating a fraudulent home modification scam. e group operated Home Owners Protection Economics Inc. (HOPE), which falsely represented itself to induce homeowners to pay fees in exchange for HOPE's assistance in obtaining federally funded home loan modifications. e group "claimed that the homeowner had already been approved for a loan modi- fication, provided phony "approval codes," quoted new (and wholly fictitious) mortgage terms and due dates, touted their 98 percent past success rate and claimed that they were "underwriters" or were otherwise affiliated with the homeowners' mortgage companies." Together, the group persuaded thousands of homeowners to part with $400 to $2,000 of fees totaling upwards of $4 million. e remaining defendant in the case, Brian Kelly, pleaded guilty and is awaiting sentencing. JANUARY CONSTRUCTION SPENDING UP 0.1% FROM DECEMBER Construction spending saw an unexpect- ed—albeit slight—uptick in January, according to monthly data released by the Census Bureau. e government's latest report shows spend- ing on all construction projects was up 0.1 per- cent from December, coming to an estimated seasonally adjusted annual rate of $943.1 billion. at figure is 9.3 percent ahead of January 2013's estimate of $863.1 billion. Economists polled by Reuters expected a 0.5 percent decline in spending to follow December's originally reported 0.1 percent improvement. Private construction spending led the way, gaining 0.5 percent month-over-month to an annual adjusted rate of $670.8 billion. Spending on private homebuilding projects was at a rate of $359.9 billion, 1.1 percent above December's revised estimate. Breaking down the numbers, spending on new single-family construction was at a rate of $186.0 billion, up 2.3 percent month-over- month, while multifamily spending came to $36.3 billion, up just 1.0 percent. On the public side, spending was down 0.8 percent to an adjusted rate of $272.3 bil- lion, with residential projects contributing about $4.5 billion, down 13.4 percent com- pared to December. The unemployment rate for February 2014 was 6.7 percent, according to the U.S. Bureau of Labor and Statistics. KNOW THIS

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