Technology Advances

Progressive actions were taken within First American’s Real Estate Information and Services segment during 2000. Further development of a full line of mortgage-related product and service offerings achieved a long-term goal: these products, when combined with those of First American Title Insurance Company, provide the industry’s most comprehensive array of mortgage loan-origination and closing services. Continuous improvement of its origination products, addition of technological advancements and revolutionary changes in the Database Information and Services group provide strong support for the Corporation’s full-line strategy. Today, it is estimated that one or more First American products are involved in approximately 90 percent of the real estate transactions made in the United States.

These advances came, however, during a year in which the group continued to be affected by rising interest rates and a slowdown in residential-refinancing transactions. Following a difficult market in late 1999, lenders continued to suffer the effects of this mortgage and refinance downturn in 2000, thus affecting the results of this group’s companies.

Operating revenues were down for First American’s Real Estate Information and Services segment during the first half of 2000, declining 16 percent in the first quarter and 11 percent in the second quarter from their respective periods in 1999. By the third quarter, as a result of operating revenue contributions from new acquisitions, operating revenues decreased only 1 percent from 1999’s third quarter. And by the fourth quarter, streamlining efforts and product consolidation helped this segment to experience a 21 percent increase in operating revenues over the same period in 1999. For the entire year 2000, operating revenues declined to $558.1 million, 3 percent less than in year 1999, and income before income taxes and minority interests declined by 11 percent to $58.1 million.

The Corporation’s technology innovations helped to raise productivity within this group during 2000, through systems designed to efficiently deliver its products and, in turn, attract clients that will increase its market share. Wide use of First American’s progressive, scalable and proprietary FAST technology is helping the group reach the goal of becoming the first in its industry to create a completely integrated system that allows products and services to be electronically ordered, routed, processed and delivered to any customer, anywhere, using any data platform. The system allows both First American and its customers to realize operating efficiencies and profitability by reducing per-order costs.

The Corporation’s primary e-commerce vehicles are FAST Web, for Internet access; FAST Win, for desktop applications; and FAST Direct, a direct connection to customers’ present systems. These systems now offer secure, electronic ordering of multiple products and around-the-clock order entry, routing, status tracking and delivery. FAST Web alone serves nearly 65,000 registered users, with approximately 1,000 additional subscribers joining the system each month.