Land America Title Companies Acquired by Fidelity National Title

Land America 1031 Exchange Shuts Down – read the email I received yesterday. This morning, the first email in my box stated that Bank of America must temporarily discontinue placing closing orders and accepting title commitments from any LandAmerica title underwriters.

This morning, Realtors, mortgage brokers, title reps and others in the business were scrambling to get definitive answers to how their opened escrows with LandAmerica would be affected.

• Title underwriter LandAmerica Financial Group has filed for bankruptcy with $2.8 billion in debts. The company has pointed the finger at Fidelity for pulling out of a $126 million takeover offer.
• The off and on combination of Land America Financial Group with Fidelity National Title Title is back again. The two signed a merger, then Fidelity terminated, now they restructured the transaction again. This time, Fidelity is purchasing the Lawyers Title and Commonwealth Land Title subsidiaries.
• LandAmerica's parent holding company and its 1031 exchange company are filing for bankruptcy. That sounds like bad news for anyone with cash sitting in a LandAmerica 1031 account. It turns out that the company had $290 million invested in auction rate securities as part of the its 1031 business.

The "on-again" merger means that means Commonwealth Land Title Insurance Company and Lawyers Title Insurance Corporation will combine with Fidelity National Title, Chicago Title, Ticor Title, Security Union Title and Alamo Title.

The combined company will have almost half of the real estate title insurance market.

It appears that escrows in process with LandAmerica will continue smoothly and future escrows should not be a problem. LandAmerica's 1031 exchange clients with funds in the hands of LandAmerica may be facing some tough challenges.

According to LandAmerica's press release - 

Under the Stock Purchase Agreement, Fidelity and Chicago Title will pay the Company $298 million in total for Commonwealth, Lawyers Title and United (Chicago Title Insurance Company will acquire Commonwealth for $158.6 million and Fidelity National Title Insurance Company will acquire Lawyers and United for $139.4 million). The closing of the transactions under the Stock Purchase Agreement are subject to approvals by the Bankruptcy Court, the Nebraska Department of Insurance, and other state and federal regulatory agencies. The Company intends to work with FNF toward a closing as early as late December 2008 and will request expedited approval from the Bankruptcy Court.

Just another "normal" day in the whacky new world order of real estate.