Cuz that’s how we roll.
From: LandAmerica CEO Communication
To: DL – Everyone at LandAmerica
Sent: Wed Nov 26 02:14:31 2008
Subject: LandAmerica Agrees to Sell Title Operations to Fidelity
Yesterday, we signed an agreement <http://landam.mediaroom.com/index.php?s=43&item=544 <http://landam.mediaroom.com/index.php?s=43&item=544> >Â to sell our principal title operations to Fidelity. This positive development is good news for our title insurance customers, employees and those who support them. Some employees will become part of the Transition Services team to assist with the orderly transition of our title operations to Fidelity. For those working in non-title subsidiaries, we will continue to assess the ongoing operations of those businesses. As we move forward, we will know more about the general impact of this transaction and will share that with you.
In order to make this transaction happen, weâ€™ve had to take two important steps. First, we filed for Chapter 11 bankruptcy protection for our holding company, LandAmerica Financial Group, Inc. and for our 1031 company, LandAmerica 1031 Exchange Services. Chapter 11 is a relief provision that enables a company with financial pressures to take care of its customers, employees and creditors in an orderly process. In effect, Chapter 11 is the way we will address the significant level of debt at the holding company.
Itâ€™s important to note that LandAmerica has over 150 separate legal entities and only two of them are in protection under Chapter 11. All of our other companies are in operation as part of LandAmerica.
The Nebraska Department of Insurance (NEDOI) is taking the other step that must occur to move our business to Fidelity. On Monday, the NEDOI filed a court order to take over our underwriters in a process called â€œrehabilitation.â€ This is critical to the process that allows Fidelity to obtain our underwriters.
Both steps, Chapter 11 for two companies and rehabilitation for our underwriters, in coordination with the stock purchase, are in the best interests of all stakeholders. While we need to obtain certain approvals, we anticipate closing as early as year-end. These actions also enable two trusted and well-respected underwriting institutions, Lawyers Title and Commonwealth, to remain strong, viable contributors to the Fidelity family of title insurance companies.
This has been an anxious and unsettling time for all of us. We will continue to update you as decisions are made. Please read the attached Q&A for employees; customer flyers are also provided for each channel.
I am deeply disappointed over the need to file for bankruptcy protection for the LandAmerica holding company and the 1031 company. The sale of our principal title operations to Fidelity offers our stakeholders the best result available in this brutal real estate, credit and capital market environment. The vast majority of our employees will have the opportunity to become part of the largest, most financially sound title insurance company in our industry as the next chapter of our history begins.
Theodore L. Chandler, Jr.
Chairman and CEO
p.s. I’m an idiot.
This makes me extremely sad. I’ve been screwing around for the better portion of a year picking on NASCAR Teddy, but this shit is serious. It’s people’s jobs. Thousands of jobs. Thousands of lives. I sure hope the board sat down and pulled all executive compensation, barred all dividends and sent NASCAR Teddy and his pit crew to the wood shed. Those assholes had better be working for $1 a month until they get this straightened out. I just hate when these dumbass executives sit around and and blame market conditions. It’s not market conditions. It’s your asinine egos and operating on credit. That’s what got you into this fine mess. Many of your units would operating properly if not for your business practices. Monstrous losses to fund the claims reserves because you outsourced the work to a foreign country does not make sense. How am I the only guy that understands that? Nevermind, OTG and Skippy get that just fine. They’ll know the exact figure, but claims reserves used to be 4% of revenue. Then it moved up to 9%. I’m now hearing numbers in the 20’s. How does that justify your outsourcing operations? The worst part of all this is that Bill ends up with the title units anyway. How can the regulators let one company, one guy, control this much of a business sector? This is terrible for the employees and awful for the consumer too. This week a FNF entity tried to charge my customer $25 for plotting out the freaking legal description on a map! No easements, just the legal. Are you kidding me? They told me they had to outsource a color coded map! Get a effin’ crayola and do your goddamned job! WTF? And this from the guy who’s going to get 46 percent of the market. Great for the consumer. Not so much. I hate being the back in the day when I was young sort, but for the love of God, every damned Title Officer used to have a freaking protractor and a rule and a box of colored pencils in their drawers. If they can’t run out the legal description, how the hell do they know what they’re insuring. This is the future of this industry and it’s a disaster for the consumer.
On another front, some idiot lender has quit accepting closing letters from LandAmerica agents. Huh?
…..will discontinue accepting Insured Closing Letters or wiring funds to any LandAmerica title agents. The following is a list of LandAmerica title underwriters to whom this will apply:
Commonwealth Land Title Insurance Company
Land Title Insurance Company
LandAmerica NJ Title Insurance Company
Lawyers Title Insurance Company
Title Insurance Company of America (TICA)
United Capital Title Insurance Company
I’m guessing this intellectual jewel came out of New Jersey. Nuff said. I’ll toss this one over to OTG.
The real pisser is that I wasn’t going to talk about title insurance. I was going to post a cute picture of my dogs and talk about training Rita last night at the Dog Club and what a great job she did. Now I’m really pissed off at NASCAR Teddy. But it’s the day before Thanksgiving, and actually the day of the Wine Dog Family Massacre, so here’s a cute picture of the dogs.
And here’s to hoping that LandAmerica doesn’t do anything else stupid today so we can all go have a nice turkey day. Oh, and a shout out to the Player, because you did the honorable thing, and oh yeah, you rock. Happy Thanksgiving…y’all!
Ahh, gentle readers. Y’all are so kind to me. Internal memo that goes something like this:
Sent: Tuesday, November 25, 2008 2:07 PM
Subject: 1031 Residential Customer Questions.pdf – Adobe Acrobat Standard
Our company is at a critical juncture, and you are on the front lines fighting for our survival. Thank you for that. I know you want answers, and I will do my best to describe where we are at this point in time.
When LandAmerica released third quarter 2008 results, we identified a â€žliquidityâ€° problem inside our 1031 operation. For years, we have invested 1031 exchange funds in a type of investment called “auction rate securities.” These are considered cash equivalents, and during the year, the issuers of these securities would hold an “auction” so that investors could buy or sell their securities. In February, the market for these securities evaporated, meaning no buyers existed for sellers like us.
We’ve pursued many options to find liquidity. We even worked a liquidity line of credit into the proposed transaction with Fidelity. We talked to the federal government about bailout money, and on November 12, Treasury Secretary Henry Paulson said only banks and automakers would be recipients. We did all we could, and our last resort was to close our 1031 operations.
That action, of course, sent customers Ë† and you, our valued employees Ë† into turmoil yesterday. One thing you can do is help customers understand that our underwriters remain financially solvent with over $300 million in combined statutory surplus and some of the industryâ€šs most stringent requirements for reserves in place to protect our policyholders. Over $1.1 billion in cash and investments back the claims reserves of our underwriters.
What are we doing in the meantime? Whatever option you may have considered, we are probably working on it. Every alternative we are pursuing requires intensive negotiations with a number of parties, which makes the process very fluid.
This is a hard time for all of us. Please know that your leadership is fighting for our customersâ€š business day and night at the highest levels, and the last chapter has yet to be written!
Don’t give up.
Sincerely, are you kidding me? Oh hell yeah. Check this out.
I’d say they’re in full scale damage control.Â I got three words Teddy.Â Horse.Â Barn.Â Gone.
Now all you have to do is find the leak.
With everything that’s happening in the financial sector right now, I’m wondering why I have to take responsibility for my business decisions but no one else has to. It kind of pisses me off. You can spend nearly a hundred years running amok doing whatever you want, not ever doing the right thing until you’re forced by the government (air bags, seat belts, Firestone 500’s) and then take not one, not two but three private jets to your hearing and we’re still talking about giving you asshats a bail out? Explain to me why BMW can build a 4200 lb vehicle that gets 32mph on the highway and you jerkoffs can build a Yukon. Or a Hummer? Or some “fuel efficient” piece of shit that explodes like a Lego car on impact? We ought to let you dumb bastards go under. And keep my tax dollars. And while we’re at it, can we put the AIG executives in jail for criminal stupidity? Or maybe grand larceny. We’re bailing these asswipes out while JOE FREAKING SIX PACK is losing his house. One after another after another. I see entire neighborhoods failing. This isn’t just fringe people who shouldn’t have bought a house in the first place, it’s cutting across the entire country. And we’re listening to the CEO’s of the Big Three after they fly private jets to Washington to ask for a hand out. That’s how out of whack this country has gotten. I’d like to pay 30 percent less on my mortgage. Sign me up.
Joint Statement by Treasury, Federal Reserve and the FDIC on The Wine Dog
FOR IMMEDIATE RELEASE
Washington, DCâ€” The U.S. government is committed to supporting financial market stability, which is a prerequisite to restoring vigorous economic growth. In support of this commitment, the U.S. government on Sunday entered into an agreement with the Wine Dog to provide a package of guarantees, liquidity access and capital.
As part of the agreement, Treasury and the Federal Deposit Insurance Corporation will provide protection against the possibility of unusually large losses on an asset pool of approximately $306 billion of loans and securities backed by residential and commercial real estate and other such assets, which will remain on Wine Dog’s balance sheet. As a fee for this arrangement, Wine Dog will issue preferred shares to the Treasury and FDIC. In addition and if necessary, the Federal Reserve stands ready to backstop residual risk in the asset pool through a non-recourse loan.
In addition, Treasury will invest $20 billion in Wine Dog from the Troubled Asset Relief Program in exchange for preferred stock with an 8% dividend to the Treasury. Wine Dog will comply with enhanced executive compensation restrictions and implement the FDIC’s mortgage modification program.
With these transactions, the U.S. government is taking the actions necessary to strengthen the financial system and protect U.S. taxpayers and the U.S. economy.
We will continue to use all of our resources to preserve the strength of our banking institutions and promote the process of repair and recovery and to manage risks. The following principles guide our efforts:
We will work to support a healthy resumption of credit flows to households and businesses. We will exercise prudent stewardship of taxpayer resources. We will carefully circumscribe the involvement of government in the financial sector. We will bolster the efforts of financial institutions to attract private capital.
Now I’m hearing ruminations that LandAmerica might get some bail out money. At least they’re cheap, the stock is what .51 cents this morning? Why does Ted still have a job? I can tell you what the problem is. They’re doing primarily REO business and they’re charging virtually nothing for the service. It doesn’t work when that’s the only business you have going. It’s fine when you’re laying down a base of solid sales, but that’s not happening right now. They can’t survive on that business model. It’s time they went back to the future and did things old school. The product is the product is the product. If you’re writing a policy and doing an escrow, charge properly for the service. Title companies survived for years doing real work in good and bad times. The new casualty model is going to make Ted’s Excellent Title Adventure a casualty. He will have the distinction of being the dumb ass that shut down the first title insurance company ever. Nice job Teddy. It’s time LandAmerica’s board stepped up to the plate and made the hard decision. They’re in a flat spin heading out to sea. It’s just a matter of time before the jetwash takes them out.
Which gets me to the final part of this morning’s rant. Maybe you’re failing because of karma. Maybe sending our jobs overseas is what got you into this mess. Maybe you deserve to fail for sending American jobs to other countries where the work is done for pennies on the dollar. Maybe that’s why GM and Ford and Chrysler and LandAmerica and the rest of you all deserve to fail. Karma. She’s a bitch.
While I still want to pick on HSUS and PETA today, I’m going to skip that in lieu of links.
- What to do when animal control knocks on your door
- Housing affordability increasing as market TANKS…according to CAR
The minimum household income needed to purchase an entry-level home priced at $287,760 in the third quarter of 2008 was $56,100, based on an adjustable interest rate of 5.91 percent and assuming a 10 percent down payment. First-time buyers typically purchase a home equal to 85 percent of the prevailing median price. That would peg the monthly payment including taxes and insurance at $1,870 for the third quarter of 2008.
Isn’t that what got us into this mess?
1600 Bay Area jobs gone. I’m sure that won’t affect the local economy in any way. I wonder how many title jobs have been lost in the State since say…July 2006? Whatever the number is, I hear we’re going to be adding some numbers to that. Bloodletting is rumored over at NATCO. Contra Costa/Alameda home prices are off by 31.8 percent over the last 12 months. That’s going to leave a mark.
Must be time for a good old fashioned rant on the title business.Â This morning my alerts picked up this interesting post by an independent.Â First, I didn’t know there were any independents left in the State of California.Â I’m glad there are.Â The fact that the bulk of the business is now controlled by either Bill Foley or Parker Kennedy annoys the crap out of me.Â The fact that the banks are driving the business to their title companies regardless of what’s right for the consumer pretty much sends me to the moon.Â I was talking to a “retired” title rep yesterday.Â She was commenting on how she didn’t know how business was going to be conducted after the new law goes into effect.Â You know, the one requiring title reps to be licensed.Â I didn’t tell her, but I had been sitting in a marketing meeting a week earlier when one of the most notorious title reps in this area was “explaining” to the group of realtors how the new licensing is going to go and what they can and cannot give away.Â This guy has printed hundreds of thousands of mailers and flyers used by agents in this area for years.Â Many years.Â Like 20 or 30 years.Â That was never mentioned but the agents had questions about title companies providing property profiles, farms and the like.Â Apparently those services are unaffected which makes sense to me.Â Actually I think they said we get the information, not the pretty binders.Â (FYI there’s a Staples in nearly every town, if there isn’t a Staples, there’s an OfficeMax.Â Someone is surely to have a binder.)Â I take care of most of my own stuff.Â I print my own flyers, pay for my own postage, copying and the like.Â I use the title companies for real information, like copies of deeds and such.Â Anywho, back to the point of the story.Â The big banks announced earlier this week that they were halting foreclosure starts on certain types of loans for a 90 day period.Â I know it’s very finite, but it is how you avoid regulation.Â On of Obama’s campaign promises was to halt foreclosure starts for a 90 day cooling off period.Â I knew that would adversely affect our business, but I felt it was a good move for the country.Â Now the big banks have taken upon themselves to do a version of what he was proposing ON THEIR OWN.Â They should have done this a year ago, but that’s what you get with the current administration.Â We’ve got the Enron mess, the oil futures mess and the mortgage mess.Â Some people/business can’t function honorably without regulation.Â Now under the threat of some real change, the banks finally do the right thing, sort of.Â At least more than they were.Â Which takes me back to the title companies and the new title rep rule and the new RESPA.Â At the end of the day, if companies were functioning from a position of honor rather than revenue, none of this would be necessary.Â FATCOLA has openly admitted that the fines aren’t bad enough to off-set the benefit of their misdeeds.Â So have many other management figures of, well, I guess the big three now.Â It’s the cost of doing business to them.Â It’s kind of like the Ford Pinto, or the rollover Explorers.Â Not one of them had the cajones to step up to the plate and say “It’s wrong and we won’t participate in it”.Â The most common stated reason was that the customers expected it.Â This is as if they were arresting the hookers and letting the johns all go.Â There’s culpability on both sides.Â So you now have regulation.Â In the end, who loses out?Â The customer and the workers, many of which are sitting home reading this right now because they’ve already lost out.
Looks like our old girl is humming a few bars over at Equity Title.Â It is a lot like the last episode of M*A*S*H.