|A mortgage service provider that is majority-owned by the First American Corp. is closing down. More than 50 employees are impacted by the move.
SecoLink Settlement Services has already reduced its staff by 45 percent since mid- March -- from 62 to 38 currently -- in preparation for closing its doors on June 30, President and Chief Executive Officer Patrick Ridley said this week. The firm will lay off the remainder in phases over the coming weeks.
SecoLink, which operates from Eggertsville, N.Y., contracts with appraisers, title abstract companies and attorneys to provide mortgage settlement services, including appraisals, title insurance and flood certifications. The firm has provided such services for the majority of KeyBank's mortgages, unless consumers opt to use another provider.
The company was founded in 2001 in Buffalo, after KeyBank consolidated its multiple mortgage processing centers nationwide into a single site in Cleveland over several years. That left about 60 to 70 displaced mortgage processors in Buffalo, so KeyBank decided to start a vendor management company.
The company is 49 percent owned by KeyCorp and 51 percent by First American Corp., a Santa Ana, Calif.-based provider of mortgage-related services. At one time, it had more than 80 employees.
KeyBank is its primary client, however, with very little business outside of the Cleveland- based banking company and no movement toward expanding a sales force. So when KeyBank decided to seek a full-service provider of mortgage services, to outsource its entire back-office operation from origination to servicing, that put SecoLink's existence at risk because it could only fill part of KeyBank's needs.
Instead, KeyBank turned to PHH Mortgage Services, part of publicly traded PHH Corp. of Mount Laurel, N. J., which also duplicates SecoLink's business. That made the smaller entity redundant. "It just encompasses what we do as well," Ridley said. "Key wanted more than SecoLink could offer."
Employees are being provided with outplacement assistance from both KeyBank and First American and can apply for jobs at either one. Ridley himself is interviewing with both firms.