Stewart Information Services Corporation (NYSE:STC) announced this week that it has acquired FNC Title Services, LLC (FNC), the parent organization of Allegiant Reverse Services (ARS). Financial terms of the deal were not disclosed.
The deal also includes the signing of an agreement for Stewart to acquire FNC Title of California pending approval of the California Department of Insurance. The Rockville, Md.-based FNC will continue to operate as a standalone company, and currently services the top 25 reverse mortgage lenders nationwide.
For additional context on the move, RMD spoke with Rob Awalt, partner and president of FNC Title Services and Allegiant Reverse Services.
Regarding the move to become more involved in the reverse mortgage business, Stewart CEO Fred Eppinger cites the demographic trends favoring the reverse mortgage business and the ongoing dialogue regarding the tapping of home equity to meet retirement goals as two leading factors behind 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 in a statement.
FNC will also be able to make use of Stewart’s own products and platforms in its ongoing efforts to serve the reverse mortgage industry, he added.
“[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.
What this acquisition means for FNC, ARS
To get a better idea of how this acquisition could have an impact on FNC and on Allegiant Reverse Services itself, RMD reached out to Rob Awalt, partner and president of FNC Title Services and Allegiant Reverse Services. Basically, at FNC and ARS it’s business as usual with the only core difference at the moment being that ARS and FNC are part of the Stewart Title family of companies, Awalt told RMD.
“[Stewart] looked at us as a company that has done our job well, and they want us to remain a standalone company,” Awalt said. “Which means we have flexibility. We’re not limited just to the products that Stewart provides, we have access to continue to do business as usual.”
Stewart also recognizes the kind of dedication that is required in the reverse mortgage space, and they are content with letting FNC and ARS continue to do what they have demonstrated they are most effective at, Awalt explains.
“We were in talks with Stewart for quite some time, and they understood the commitment needed in the reverse mortgage space,” he said. “Especially to our clients and customers, but more so to the senior citizens. They appreciate that, and were very much interested in continuing down that path.”
In time, the resources available to Stewart companies in terms of technology and other digital tools will allow Allegiant and FNC to access a bigger “think tank,” and the financial security that comes from being a part of a company like Stewart will only serve to strengthen the overall organization, Awalt explained.
“There are rough seas out there right now for all of our partners and the lenders, and this certainly puts us in a position to not be as concerned with that,” he said. “[This allows us to] continue to grow and get better, and to position ourselves for the long haul.”
What the reverse mortgage industry should know about the move
When asked what the broader reverse mortgage industry should most take away from this acquisition, Awalt says that Stewart’s desire to enter the reverse space should serve as a reinforcement of the business and industry at large.
“We’ve all been around long enough to know that we had some big name companies exit the space in the early 2010s, and then we had some big name companies step into this space between 2017-2020,” he said. “That’s exciting for the whole industry, and now here’s another example but from the vendor side. You’ve got one of the largest title companies in the nation that believes in what the reverse mortgage space is doing.”
They understand as well as anyone that there are some rough waters ahead, Awalt explained, but they remain undeterred.
“They’re betting on the long haul,” he said. “For them to put this kind of investment into this space, I think that speaks well to all of us in the reverse mortgage industry.”
Awalt launched Allegiant Reverse Services in 2016 as a division of FNC Title after serving as president of Premier Reverse Closings (PRC).