Stewart addresses its entrance into the reverse mortgage space
Leading title insurance company Stewart Information Services Corporation (NYSE:STC) recently noted in an earnings call that it saw weaker financial results in Q4 2022 compared to the same period one year earlier due to a difficult rate environment and softening demand.
During the Q4 earnings call, CEO Fred Eppinger also addressed a recent acquisition that allowed the company to enter the reverse mortgage business.
“During the fourth quarter, we added FNC Title Services — which specializes in providing Title Services for reverse mortgage transactions — and BCHH, the national provider of Title Services to institutional investors and lenders,” Eppinger said. “Both companies are leaders in their respective fields that are important to our strategy to increase our service offerings and scale.”
The company is currently in the process of integrating FNC Title — the parent company of Allegiant Reverse Services — into its corporate infrastructure, Eppinger said.
Company CFO David Hisey later described what helped to inform the acquisition of FNC/Allegient.
“We’re sort of looking for market segments where you can differentiate in the half growth potential with what’s happening [in the broader] economy with demographics and the like,” Hisey said.
Acquisitions like FNC/Allegiant offer Stewart greater flexibility to source business based on a growing demographic, like the one for the reverse mortgage industry, as there has been rapid growth in senior-held home equity over the past two years. Recent data related to senior-held home equity by the National Reverse Mortgage Lenders Association (NRMLA) and RiskSpan pegged the figure at $11.81 trillion.
Stewart moved to acquire FNC Title Services and its business, including Allegiant Reverse Services, this past October. Eppinger spoke to RMD in October about the move.
“As more and more homeowners are looking at home equity as viable retirement savings, the demand for reverse mortgages is increasing, and FNC has built one of the largest and best settlement service providers for reverse mortgages,” Eppinger said.
FNC also plans to make use of Stewart’s products and platforms while serving the reverse mortgage industry, Eppinger said.
“[FNC]’s strength in reverse mortgage complements our existing Lender Services business lines and continues our momentum as we build a leading Lender Services organization,” Eppinger said.