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World Title Co. Seized by State for Insolvency

June 17, 1995|THOMAS S. MULLIGAN | TIMES STAFF WRITER

Irvine-based World Title Co., hit with plummeting revenue during last year's real estate slowdown, was seized as insolvent Friday by state insurance regulators.

The Insurance Department said the firm lost $300,000 to $400,000 in May and had a net worth of negative $1.85 million as of last month.

However, World Title's customers should not be affected by the action because the company's pending title orders will be purchased by American Title Insurance Co. of Irvine, the department said in a statement.

With revenue of $44 million last year and $55 million in 1993, World Title was one of Southern California's largest "underwritten" title companies, or firms that act as agents for title insurers but do not perform their own underwriting.

World Title is the largest of nine title companies the Insurance Department has seized in the last nine months, Deputy Insurance Commissioner Gary Hernandez said. Like the others, World's business grew fast during the home refinancing boom of two to three years ago and then constricted brutally last year when the Federal Reserve Board pushed interest rates higher.

Suddenly, "there wasn't enough business to support the infrastructure," Hernandez said.

World had five offices and about 250 employees, many of whom will join American Title.

American Title's parent company, Fidelity National Financial Inc., had been in negotiations to take over World Title, but decided against the deal when the latter's deteriorating financial condition became evident, said William P. Foley II, Fidelity president and chief executive.

Times staff writer James S. Granelli in Orange County contributed to this report.

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