To strengthen its association with Bank of America Corporation (BAC), CoreLogic Inc. (CLGX) recently entered into a services agreement pursuant to which the company will continue to provide flood and tax services to the mega bank. For this it acquired the flood zone determination and tax processing services assets and operating platforms from Bank of America in the first week of Jul 2013.
CoreLogic has had a successful long-term association with Bank of America. The acquisition of the flood zone determination and tax processing services assets aims to enhance this relationship further. As per the agreement, the flood zone determination and tax services operations of Bank of America will be added to CoreLogic’s existing flood and tax servicing business units within the Mortgage Origination Services segment. The aggregate financial results of its existing and newly acquired flood and tax services business will be reported within this segment.
CoreLogic through its property tax service business in the U.S., is in association with more than 20,000 tax authorities. The company on behalf of mortgage originators and servicers examines real estate taxes and indemnifies mortgage lenders against losses from a failure to detect off the mark taxes. Again, through its flood data services, the company provides flood zone determination services to mortgage lenders. The integration of Bank of America’s flood and tax servicing operations will expose CoreLogic to a wider platform for providing these services thereby achieving growth in the same.
CoreLogic's focus is to enhance its operating leverage and expand its Mortgage Origination Services segment. During the first quarter of 2013, this segment witnessed an increase in revenues by 24.5% year over year to $176.5 million, which contributed 44% to total revenues of the company. The above deal is expected to be accretive to revenue growth and margin expansion going forward.
CoreLogic has been working to enhance its Mortgage Origination Services segment through strategic acquisitions. In this regard, the company acquired RESDirect from RELS in Feb 2013. RESDirect is now included as a component of the Mortgage Origination Services segment.
CoreLogic currently carries a Zacks Rank #3 (Hold). Among other consultants, Franklin Covey Co. (FC) and Gartner Inc. (IT) carry a favorable Zacks Rank #2 (Buy) and appear impressive.
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