by Mark Basch, The Daily Record
A shift in the mortgage market is producing a shift in operations for Fidelity National Financial Inc.
With the recent increase in interest rates and a slowly improving housing market, Fidelity's title insurance business is seeing a decrease in refinancings and an increase in mortgage loans for home purchases.
"We responded to that decline in open refinance orders by reducing headcount by nearly 670 positions over the past six weeks," CEO George Scanlon said in Fidelity's quarterly conference call with analysts last month.
"As we have consistently demonstrated in the past, we will closely monitor productivity and operating metrics with discipline and adjust expense levels to current market volumes to mitigate the impact to earnings associated with the transitioning market," he said.
Dan Murphy, senior vice president and treasurer, said by email that fewer than 40 of those jobs were in Jacksonville, but the company is hiring in other areas locally "that will offset (the cuts) and result in an increase in jobs."
Fidelity has about 800 employees in Jacksonville and 60,000 overall, including all of its businesses.
Scanlon said Fidelity's main business, title insurance, may see a decline in order volume because of the shift from refinancings to purchases, but he doesn't expect that to have a big impact on the company's bottom line.
"As our mix changes and becomes more heavily weighted to purchase transactions, it is important to note that on average, we earn twice the revenue on a purchase transaction versus a refinance transaction," he said.
Jacksonville-based Fidelity last month reported second-quarter adjusted earnings of 68 cents a share, 3 cents higher than last year and 6 cents higher than the average forecast of analysts surveyed by Thomson Financial.
Fidelity officials didn't have much to say in the conference call about the company's pending acquisition of Jacksonville-based Lender Processing Services Inc.
"We continue to work through the filing and approval processes toward an expected fourth-quarter closing," Chairman Bill Foley said.