Mercury looking to sell Colorado title companies
Investor, underwriter First American said to be buyer
By Inman News, Monday, August 4, 2008.Mercury Companies Inc., a Colorado-based holding company that's closed down its title and escrow companies in California, Arizona, Texas, Oregon and Nevada says it's in negotiations to sell its remaining title companies in Colorado to First American Corp.
A spokeswoman for First American would not comment on the announcement by Mercury, which claims the companies are negotiating interim financing for the sale of Mercury's Colorado companies, including Security Title, First American Heritage, Title America and United Title Company.
"While rising economic pressures and a declining real estate market forced Mercury Companies to close its operations in Arizona, Texas and California, its 60-year-old Colorado title companies continue to remain profitable and maintain strong market leadership, sharing approximately 30 percent of the Colorado market," Mercury said in a statement.
On July 29, Mercury shut down its title and escrow subsidiaries in California, Texas and Arizona, including Financial Title and Lenders Choice Title, after the parent company was reportedly denied additional credit by lenders (see story).
Mercury abruptly shut down California-based Alliance Title in December, and now faces lawsuits by the California Labor Commissioner and former employees who claim they are owed unpaid wages and expenses (see story).
First American, which is the sole underwriter of Financial Title and Lenders Choice, is helping clients of those companies with pending transactions move them to closing. Those with pending transactions are advised to call (925) 249-2819 for more information.
First American is also engaged in a legal battle with Mercury over its stake in the company and millions in loans dating back to 2001. In a press release Friday, First American put the carrying value of its investment in Mercury at $37.3 million, but said its write-downs of the investment could affect preliminary second-quarter earnings of $42 million (see story).
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Submitted by Joe Dahleen on August 4, 2008 - 1:10pm.
This is interesting because AZ has been a hot bed for problem title companies over the past few month.
Wells Fargo and Ticor Title in hot water over fines.
Wells Fargo, Ticor settle allegations of false FHA claims.
Federal prosecutors in Arizona said they reached a $4.3 million civil settlement with Wells Fargo Bank and Ticor Title Agency of Arizona this month that settles allegations that Wells Fargo submitted false claims to the Federal Housing Administration's pre-foreclosure sales program.
For 63 units Wells paid an average of $68,253.97 per transaction. That is a big mistake.
Now it looks as if legal battles for Mercury forces sale. Title companies have been printing cash for years and now we know that it cost money for not following the rules.
Submitted by Joe Hildebrand on August 4, 2008 - 7:28pm.
This has Erin Toll's name all over it.
It's just like they say: "When the real estate industry catches a cold, a lot of companies in the 'assisting' industries i.e. title, warranty, mortgage, etc...die!"
The downturn has taken another victim. RIP Mercury companies.