Title Insurer Taps Servicing Business
Title insurer Fidelity National Financial (FNF) plans to acquire LoanCare Servicing Center, a loan subservicer and outsourced loss mitigation service provider that will integrate with Fidelity's lender platform. Previously a wholly-owned subsidiary of LandAmerica Financial Group, LoanCare will join a family of acquired LandAmerica businesses at Fidelity, including Commonwealth Land Title, Lawyers Title and Unit Capital Title. The new deal costs Fidelity $16.3m and brings LoanCare's $12.4m in tangible equity. "We believe that LoanCare and ServiceLink, our national lender platform, can generate substantial ancillary product revenue opportunities through the subservicing and loss mitigation platforms, including additional title and closing revenue, trustee sale guarantees, valuations and a broad range of significant default based revenues," said chairman William Foley in a media statement Thursday. The acquisition comes at a time when Fidelity seems to need the additional income stream to offset its quarterly losses. The company in late April posted a $12.4m net loss for the first quarter as the housing market continued to unwind, dragging order volumes. Fidelity might suffer the housing bust, but it also enjoys the booms that go along with it. For example, recent swells in refinance volume made for increased title insurance order volume, but the influx also increased the delay time until an order closes. The acquisition of LoanCare, when complete, may not aid in the closing of title insurance orders, but it should help Fidelity streamline the subservicing side of its lending platform. Write to Diana Golobay. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments.