Fidelity Reports Q3 Earnings Results
October 21, 2010
Fidelity National Title Group reported a pre-tax margin of 10.5 percent during the third quarter of 2010, according to Fidelity National Financial.
According to third-quarter results, the title group earned $135.5 million. This is up from $119.8 million during the same period a year ago.
"This was another solid quarter for our title insurance business," said Chairman William P. Foley, II. "In particular, refinance order volumes showed strength throughout the quarter, moving from 10,500 open orders per day in July to more than 11,400 open orders per day in both August and September.”
For the quarter, refinance orders comprised approximately 67 percent of total open orders and 63 percent of closed orders, with closed refinance orders peaking at 67 percent of total closed orders during the month of September.
Overall, Fidelity’s direct operations opened 711,900 orders during third-quarter 2010, up from 568,600 open orders during the same period a year ago. Meanwhile, the company closed 408,000 orders during Q3, while closing 438,700 during the third quarter a year ago. Fidelity’s commercial business improved its commercial revenue to $67.8 million during the latest quarter.
“While we started to see an increase in closing activity later in the quarter, a large number of the third quarter open orders will actually close during the fourth quarter, providing further earnings momentum as we close out 2010,” Foley said.
Foley said there has been significant discussion and speculation concerning Fidelity’s involvement with foreclosures and potential risks the company faces from those transactions. Many lenders have announced that they have halted foreclosures and the sale of REO properties due to possible flaws in documentation used in the foreclosure process.
“We do not believe that this situation will have a material adverse impact on our title business. FNF's title insurance underwriters issue title policies on REO properties to new purchasers and lenders to those purchasers,” Foley said. “FNF believes that these policies will not result in additional claims exposure to FNF because the new owners and their lenders would have the rights of good faith purchasers which should not be affected by potential defects in documentation. Even if a court sets aside a foreclosure due to a defect in documentation, the foreclosing lender would be required to return all funds obtained from our insureds, resulting in no loss under the title insurance policy.”