Two of the nation's largest title insurance and settlement companies agreed to a merger on Friday, a combination that puts five Western Pennsylvania locations with hundreds of workers under one name.
The merger comes amid continued consolidation in the mortgage industry driven by the nation's mortgage and credit crisis.
Fidelity National Financial, Jacksonville, Fla. agreed to buy struggling LandAmerica Financial Group, Richmond, Va., for more than $128 million in stock yesterday. Fidelity is the nation's second-largest title company, while LandAmerica is the third-largest.
Together, they employ about 26,500 people nationwide, including an estimated 1,500 or so workers in Allegheny, Beaver and Washington counties.
Fidelity National said it expects to wring at least $150 million in operating costs from each company. During a conference call with Wall Street analysts yesterday, Chairman William Foley II said the company will review for possible consolidation or sale "everything you can think of with two large companies coming together."
Spokesmen for neither Fidelity National nor LandAmerica, however, would comment on local employment or consolidation plans. Fidelity National said in October it would cut 900 jobs nationally by year's end, after eliminating 3,100 positions in 2007, and 1,700 in 2006.
"When things slowed down, they both let people go," said Jeff Schurman, executive director of Title Appraisal Vendor Management Association, a trade group in Moon.
"I doubt they'd let many people go here," he said. "Those who are left are people doing title production, which is a fairly specialized service. You don't just pull people off the street for that."
Both companies have offices in the Pittsburgh region with significant employment, according to industry estimates. They include:
• Fidelity National's Service Link offices in Hopewell, Beaver County (title and appraisal management services) and in Moon (regional headquarters and appraisal management) together employ well over 500.
• Fidelity National affiliate LSI in Coraopolis (title processing and appraisal management) employs about 500.
• LandAmerica's Nationwide Appraisal & Title Services, Washington (processing and appraisal management) employs about 400.
• LandAmerica's Lenders Services, Moon (title and closing services) employs about 100 workers.
"The unprecedented credit freeze and depressed real estate market have negatively impacted our business to the point that it has become increasingly difficult for LandAmerica to remain an independent public company," said Chairman and CEO Theodore Chandler Jr.
The merger announcement did not surprise Schurman, who said, "LandAmerica has been rumored to be for sale for about a year. Consolidation (in mortgage servicing) has been going on for awhile now."
For instance, locally based Lenders Services was acquired by Fidelity National in 2003. It also acquired locally based Service Link in 2005.
The national's largest title and settlement company is First American Corp., which had cut more than 12,000 jobs since early 2007.
Combined, Fidelity National and LandAmerica will control nearly half the title insurance work in the United States, Foley told analysts, but said he "doesn't anticipate an antitrust issue."
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