Stewart's First Quarter Hurt By HUD-1 Change

Stewart Information Services Corp., Houston, said its first quarter was impacted by poor weather in January and February that reduced new title orders (and ultimately loan closings) as well as issues related to the new HUD-1 form that went into effect Jan. 1 2010. The latter created a backlog that negatively impacted Stewart's first quarter results, but the company added the situation should improve in the second quarter. The company lost $29 million for the first quarter 2010, an improvement over the loss of $37.6 million for the same period one year prior. For title companies, the first quarter of the year is typically difficult because home sales are normally slow. For the quarter, Stewart had 96,900 orders open (38,500 in March alone), compared with 141,400 for the first quarter of 2009. Still, as competition in the title industry decreased, Stewart's market share was at an all-time high of 16.1% for the fourth quarter 2009, said chairman and co-chief executive Malcolm S. Morris. "Much of the market share improvement is being driven by a highly-improved agency network, with fewer anticipated claims to us. Stewart has increased title premium rates or has increases pending in 28 states. We continue to actively increase remittance rates from agents where warranted and remain focused on competitive and profitable pricing in all states," said Morris. However, in the first quarter, Stewart had title losses and related claims of 7.9% of title revenues, vs. 6.5% one year prior; more than 60% of cash claim payments are from policies issued by now-cancelled agents.