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Mortgage tech provider Blend Labs inc. has a buyer for its national title insurance and settlement services provider Title365 — Glendale, Colorado-based Covius Holdings Inc.
Kirby Hulbert
In announcing the deal Monday, Covius said the company will continue to provide integrated title and closing services to Blend customers, with Title365 President Kirby Hulbert joining Covius Services, the company’s settlement services team.
Rob Clements
“Covius has long been a market leader in providing a broad set of services to the mortgage industry,” Covius Chairman and CEO Rob Clements said in a statement. “Title365 will further expand and scale Covius’ presence in the origination title space and complement our strength in loss mitigation and default title.”
Terms of the deal, which is subject to third-party consents and regulatory approvals, were not disclosed. Blend announced last month that it had entered into exclusive negotiations to sell its Title365 business to pursue a “software-first” business model.
Nima Ghamsari
Blend co-founder and CEO Nima Ghamsari characterized the deal with Covius as a partnership, saying it will allow Blend “to sharpen our focus on becoming the leading software platform for financial services, while ensuring our customers continue to get seamless access to best-in-class title services.”
As a title insurance agency licensed in 43 states, Title365 performs title search services and places title insurance policies with third-party underwriters. Title365 provides escrow, closing and settlement services on real estate transactions and title services on home equity lines of credit and home equity loans.
John Surface
“In addition to expanding our product offering and deepening our client base, the acquisition of Title365 gives Covius additional integrations with leading loan origination and point of sale systems to provide even more cohesive solutions to our clients,” Covius Services CEO John Surface said in a statement.
Blend acquired a 90 percent stake in Title365 from Mr. Cooper Group in 2021 for $422 million, taking out a $225 million term loan and obtaining access to $25 million in revolving credit to finance the deal.
When the business of refinancing mortgages was booming in 2020, Title365 generated $212 million in revenue and counted six of the top 12 U.S. mortgage lenders as clients. But rising mortgage rates curtailed demand for title insurance.
Last year, Title365 generated $46.3 million in revenue for Blend, down 59 percent from $113.6 million in 2022, when it was the company’s biggest source of revenue.
In 2023, Blend amended the terms of the debt it took on to acquire Title365, extending the maturity date until June 30, 2027 — but only if certain conditions were met. The conditions were not met, and last year, Blend raised $150 million from Haveli Investments to pay the Title365 acquisition debt off.
Haveli Investments gained a seat on Blend’s board and preferred stock convertible into Blend common stock at $3.25 per share. Haveli was also granted the right to purchase an additional 11 million shares in Blend over a two-year period for $4.50 per share, or $50 million.
Shares in Blend, which in the past year have traded for as little as $2.08 and as much as $5.52, closed down 2 percent Monday at $3.67.
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