First American Title Insurance Company Introduces New Rate Plan For Refinance Transactions
March 17, 2005
Single-Rate Title and Escrow Product Simplifies and Reduces Cost of Refinance Transactions
SANTA ANA, Calif., -- First American Title Insurance Company, plans to file “First American One Rate,” a new title insurance rate plan for California mortgage refinance transactions. Leveraging the company’s increased operational efficiency, First American One Rate is the industry’s first look at simplifying, clarifying and reducing title insurance and escrow rates for residential refinancings.
Recently consumers, California Insurance Commissioner John Garamendi and the media have suggested that title insurance rates should be lower. In an industry-leading move to address these concerns, First American, through its investments in technology and centralized processing capability, can now offer this rate reduction on refinance transactions in California.
Under First American One Rate, refinance customers in this state will benefit by receiving a single rate that includes virtually all necessary title and escrow services. In addition to providing clarity, this new rate plan will significantly lower the overall cost to the consumer. California consumers will benefit from an average discount of approximately 30 percent on existing title rates for refinance transactions using First American’s One Rate. Available from First American directly or through its agents, this program provides unprecedented transparency for consumers to better understand the costs associated with the closing of a refinance loan.
“Consumers can now ask their mortgage broker or lender for First American’s One Rate and be assured that they are getting the highest value package of services in the market today,” said Parker S. Kennedy, chairman and chief executive officer of The First American Corporation. “Because of our significant investment in technology, data and efficiency tools exceeding $100 million over the last five years, we are now uniquely positioned to lead a new approach to refinance transactions and bring One Rate to market.”
Gary L. Kermott, president of First American Title Insurance Company, stated: “The multitude of new mortgage products that have recently emerged have caused what appears to be a permanent change in the nature of the refinance business on a go-forward basis. Our commitment to building the industry’s state-of-the-art centralized production environment combined with the increased frequency of title searches for successive refinance customers and improvements in title search and examination databases, now translate into cost savings for California consumers using First American’s One Rate program.”
Following examination and review by the California Department of Insurance, it is anticipated that the revised refinance title rate would become effective in 30 days.
Assuming that real estate values and the volume of activity, including the mix between refinance, resale, and commercial transactions, remain unchanged from 2004 levels, the company expects this rate reduction would result in a decrease in net income of approximately 6 cents per diluted share in 2005. However, any decrease in net income could be offset by factors such as anticipated market share gains, operating efficiencies and growth in the company’s bundling program.
Source: The First American Corporation