Title Companies Saw Business Drop by half in 2008

 

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Copyright 2009 ProQuest Information and LearningAll rights ReservedCopyright 2009 CBJ, LP Orange County Business Journal

9 March 2009 - 15 March 2009

SECTION: Pg. 27 Vol. 32 No. 10 ISSN: 1051-7480

ACC-NO: 12879

LENGTH: 883 words


TITLE: Title Companies Saw Business Drop by half in 2008

Signature: Mueller, Mark

ABSTRACT

In 2003, the 15 largest title insurers here handled a record $ 95 billion in transactions. Since 2003, the OC title industry has experienced a decline in business each year. TEXT

REAL ESTATE: Tough housing market to refinance rules led decline

Orange County, the largest title insurers and their employees, he took on the chin last year.

County of Title 12 largest companies that write policies protecting buyers of homes and other real property to challenge the claims of ownership - have seen their business in 2008 nearly halved from a year earlier.

In 2008, the largest title insurers here have $ 18.1 billion in insurance to work, as this week Business Journal list. This is a decline of 49% from 2007.

The decline was expected given the mortgage and housing implosion that began in 2007 and spread to commercial real estate last year.

Only two companies on the list this year showed an increase in business last year - No. 8 CalCounties Nation title and No. 9 LandSafe title.


CalCounties was purchased in 2007 and a new management team redesigned the company.

LandSafe business is related to Countrywide Financial Corp., which was sold to Bank of America Corp. for $ 4 billion earlier this year.

The decrease in 2008 under the business world has exceeded 27% decrease in sales of new and existing homes last year. Refinance work also slowed sharply last year because of more stringent lending hit companies and turmoil in the banking sector.

Consolidation

Since 2007, a number of companies have combined title, offices closed or shut down altogether, reducing the total number of companies on the list this year by two.

The list ranks title insurers by their parent companies, many of which have combined entries for their activities here. Anaheimbased First American Real Estate Solutions LP, a unit of Santa Ana-based First American Corp., No. 2 on the list this year, provided data for classification.

For our chef, eight operations of local private firms at some point in 2008, the same amount received in 2007.

The biggest change in the list provided with Richmond, Va.-based LandAmerica Financial Group, which for several years, ranked No. 3 on the list behind Jacksonville, Fla.-based Fidelity National Financial Inc First American.

LandAmerica, which has about 15% market share of the country and until last year held a 20% share of the local market, filed for bankruptcy in November.

The company, which saw a decline of nearly 93% in OC business last year, sold a large part of its business to Fidelity National, which retained the No. 1 spot on our list, despite a combined decrease of 48% in business for all its units.

LandAmerica more standalone entry in our list. Fidelity National and First American, with their subsidiaries, now have a combined market share in Orange County totaling about 70%.

The two companies - who also lives at the national level have the greatest respect of operations - about 42% market share in 2004 but have steadily increased their presence through acquisitions and competitor attrition.

The weak mortgage markets and housing was in 2008, the slowest of the last decade for the titles of the insurers, by a wide margin. In 2003, the 15 largest title insurers here handled a record $ 95 billion in transactions.

Since 2003, the OC title industry has experienced a decline in business each year.

The results here appear worse than what is seen elsewhere in California. Through the end of September, the number of premiums written in the state decreased by 33% from a year ago, according to the Washington, DC American Land Title Association.

Nationally, there was a 28% over the year in business fall to work, as the association as the most recent data. The industry has seen 10 straight quarters of declining volumes, and each quarter the decline was larger than the previous one.

In recent months, there have been some positive signs of increased activity mainly to refinance as the owners try to take advantage of low interest rates, according to officials at First American.

In October, the title of First American business has been seen on 5400 orders per day. In January, over 10,000 orders per day. In February, they were 8800 a day, the company said during a teleconference with analysts late last month.


Nearly 60% of new orders in January and February were for refinancing work, compared to 40% the previous quarter. This represents less money for companies because the title of the profit margin for a refinancing of the order is approximately half of what it is to sell a home, company representatives said .

Job cuts continued to be the norm for the industry last year.

Our estimates the total list of employees of companies on our list of 1825, a decline of 21% a year ago. This figure includes conjecture on our part - many companies on the list this year refused to provide their employees account.

The Business Journal has estimated that the title of largest local employer, First American, to cut its staff 22% to around 1,000 employees. It is 42% off its highest levels in June 2006.

By comparison, Fidelity National Financial has experienced a decline estimated at 6% for workers. But figures from Fidelity has been helped by the estimation of some workers over LandAmerica.

Fidelity may see a much larger decline this year as it fully integrates LandAmerica.

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