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North American Title Insurance Company is a seasoned title insurance underwriter that has been helping customers achieve the American dream of homeownership for more than 50 years. In the past several years, we have become known as the “underwriter next door,� because our associates are always easy to reach and our processes are, at all times, quick and straightforward. Our agency application process is fast and transparent for qualified agents. NATIC offers a one-hour underwriting response guarantee that is unparallelled in our industry. In addition, we value our agents based on their title industry knowledge and experience, not just on profits alone.

A.M. Best Affirms and Downgrades Ratings of First American Title Insurance Group and First American Corporation; Revises Outlook to Negative

September 10, 2007

OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best Co. has affirmed the financial strength rating (FSR) of A (Excellent) and downgraded the issuer credit ratings (ICR) to "a" from "a+" of First American Title Insurance Group (First American) (Santa Ana, CA) and its member companies. A.M. Best has also downgraded the ICR to "bbb" from "bbb+" of First American Corporation (NYSE: FAF) and the debt ratings to "bbb" and "bb+" from "bbb+" and "bbb-", respectively, on its existing senior debt and preferred securities. The outlook on all ratings has been revised to negative from stable. (See link below for a complete list of the companies and ratings.)

While the ratings reflect the group's significant market presence within the title industry, this is partially offset by concerns following a pre-tax charge of $243.6 million in reserve strengthening due to unfavorable loss development from prior years, particularly the policy years of 2004-2006. The recent reserving action follows a $155 million pre-tax charge due to unfavorable loss development from prior years the group took in the second quarter of 2006. The higher than expected claims arising from 2004 through 2006 derived from the significant increase in defaults, foreclosures and mortgage fraud that has developed in 2007 related to mortgages originating in those years, particularly those in the subprime category. The group remains challenged to achieve future profitability owing to a significant softening in key real estate markets, which have negatively impacted title premium revenues in the current year. The group also faces execution, integration and market risks posed by recent title related acquisitions. The outlook is based on First American's challenge to manage the current real estate down cycle and improve operating earnings.

For a complete list of First American Title Insurance Group and First American Corporation's FSRs, ICRs and debt ratings, please visit

Source: A.M. Best Co.

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