Trans Union Corp. Is Set to Acquire Flood-Hazard Firm

In a move to expand its mortgage services business, Trans Union Corp., Chicago, is acquiring Flood Zones Inc., a flood hazard certification services company in Austin, Tex.

The two companies had been partners in an arrangement under which Trans Union provided Flood Zones's flood certification to lenders.

Flood Zones compiles a data base, FloodWare, that dispenses flood certification to lenders on demand. Trans Union has a certification program that tracks flood-map revisions by the Federal Emergency Management Agency and notifies lenders if a flood-zone certification has changed.

"Trans Union is committed to providing mortgage lenders all the risk- management tools they need to make informed decisions and comply with federal legislation throughout the mortgage-origination process," said Rick Lynch, vice president of Trans Union. "Since flood certification has become an essential element of the mortgage-lending process, we felt that we could better meet the needs of our customers if the services of Flood Zones were brought in-house."

The financial backing of Trans Union is necessary for Flood Zones to continue to service its customers, said Ronald M. Smith, president and chief executive officer of Flood Zones.

The National Flood Insurance Reform Act of 1994, spurred by floods in Mississippi in 1993, requires all mortgages be certified and monitored for possible changes in flood-hazard areas. Homes in flood zones were already required to have flood insurance. The new law required borrowers to purchase flood insurance on a home when areas are remapped into flood zones.

In September, Strategic Mortgage Services Inc. acquired Geotrak, a company that provides flood-mapping services to offer many services to mortgage lenders.

In light of the floods in Northern California in January, devastating flooding in Georgia last August, and the Mississippi floods, the two companies are responding to a growing need on the part of lenders.

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