Despite a 36% year-over-year decrease in closed title purchase order volume and a 79% decrease in the number of closed refinancing orders compared to Q4 2021 Fidelity National Financial Still left a strong record Q4 2022.
Fidelity CEO Mike Nolan told investors during the company’s fourth-quarter earnings call on Thursday morning, Despite the decline in titles, our title business continues to perform well: “Volume in 2022 is expected to hit record 2021 levels, largely due to the sharp rise in mortgage rates in recent months.” Backlogs started to drop, so we responded with disciplined cost action.”
These cost-saving measures helped Fidelity’s title segment record revenue of $1.9 billion in the fourth quarter (down from $3.1 billion in Q4 2021), with net income of $198 million . Direct title premiums ($544 million), agency title premiums ($708 million) and commercial revenues ($344 million) declined 47%, 48% and 37% respectively in the quarter. , the total cost per file increased by 21%. $3,649.
However, Nolan said it was the second-best fourth quarter on record for commercial earnings, following the record-setting fourth quarter of 2021.
For the full year 2022, Fidelity’s title segment posted revenue of $9.5 billion, down 11% from 2021, with title revenue of $790 million. Overall, the company reported overall revenue of $11.556 billion and net income of $1.136 billion in 2022, down from $15.643 billion in 2021, down from $2.422 billion a year earlier. bottom.
“We have a track record of responding quickly to adjust order volumes,” said Nolan. “For full-year 2022 net and acquisitions, we will reduce title headcount by approximately 26% and continue to manage our business based on market conditions.”
Nolan said the company continues to look for opportunities to strengthen its business through acquisitions and hiring talent already established in the industry.
Fidelity management expects the year ahead to be challenging as mortgage rates continue to volatility through 2023.
“I don’t think I’ve ever seen rates move this fast in such a short period of time. When they’re moving that fast, it definitely affects the order book very quickly,” said Nolan. “In a more normalized environment with more gradual rate increases, purchase orders would hold up much better, but in this environment those buyers would quickly choke. rice field.
“FNF is well positioned to navigate this high mortgage rate environment with its disciplined operating strategy and long history of navigating market cycles,” he added.
Unlike other Big Four title firms, Fidelity executives answered questions about the attorney’s opinion. fannie mae April 2022. So far, executives said they’ve seen no impact on title numbers from AOL.
“There are promotions around them to lower costs for consumers, but I don’t think anyone has actually shown it. so many unknowns And there are so many things they don’t cover,” Nolan said.