Real estate brokerage Compass announced Wednesday that it has signed an agreement to acquire Denver metro area based title insurance company First Alliance Title LLC, its fourth title insurance acquisition in the past year and second this month.
According to Compass, the transaction is expected to be finalized before the end of the year. The financial details of the deal are not being disclosed.
First Alliance Title was founded in 2014 by real estate professionals and it currently has three locations in the Denver area.
This latest acquisition expands Compass’s title and escrow services to California, Colorado, Florida, Washington, Maryland, Virginia, Washington, D.C. and Texas.
Compass first began expanding into the title and escrow space last October, when it acquired Seattle-based title and escrow software start-up Modus. A few months later, the Robert Reffkin-helmed brokerage struck up a deal with Washington D.C.-based KVS Title.
In its analysis of Q2 2021 figures surrounding mortgage and real estate closings, FundingShield found an overall increase in the risk of wire and title fraud, with two in five (40%+) transactions categorized as high risk.
Presented by: FundingShield
The brokerage’s latest expansion occurred a little over a week ago, when it acquired Dallas-based title insurance company LegacyTexas Title.
Compass’s expansion into title and escrow services has not been without hiccups. In March 2021, the Washington state insurance commissioner filed an order to revoke Modus’ insurance license for allegedly violating a real estate regulation preventing title and escrow companies from giving individuals who place business with the title insurer any form of direct or indirect payment, fee or reward.
In June, the Washington state insurance commissioner issued a minimum $15,000 fine to Modus for violating regulations, including those related to inducements and other non-title services offered to real estate agents. The company’s license is not being revoked.
Compass has not been shy about its goal of expanding into every part of the real estate transaction, including ancillary services such as mortgage, concierge, bridge loans, and title and escrow. The brokerage also announced in August that it would be launching a mortgage joint venture with Guaranteed Rate, called OriginPoint.
As more and more brokerages like Compass enter into the title insurance industry, the traditional “Big Four” title insurers Fidelity National Financial, First American Finance Corp., Old Republic National Title and Stewart Title have been making acquisitions of their own in an attempt to stay ahead of the competition.