Industry News

Fitch warns of First American Corp. ratings downgrade

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Analysts at Fitch Ratings say it's likely they'll lower the ratings of First American Corp. and its title insurance companies by a notch once the company posts results for the year on Feb. 28. In separate announcements last week, First American said it was spinning off its title insurance and related financial business into a separate company, and that it expected to report a $50 million fourth-quarter loss (see Inman News story). First American officials said the company would have been profitable if not for "catastrophic losses" from October wildfires in California, write-downs of "certain private strategic investments and operational assets," litigation reserves and employee severance payments. First American announced 1,900 layoffs in September (see story). But Fitch analysts noted that in announcing its fourth-quarter earnings expectations, First American also revealed results were dented by higher provisions for title claims. Fitch said it was placing First America...