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Transnation Title Survives In West Michigan
Transnation Title in West Michigan has gone independent and survived the travails of the real estate market, making for a leaner operation more able to compete.
"We saved some jobs, and we kept our records in the state. To us, those are very important things," said Monte Reinert, president of the new Transnation Title Agency of Michigan.
For generations, the Transnation brand, along with Lawyers Title and Commonwealth Title, has been owned by LandAmerica Financial Group of Virginia. Reinert had been manager of the three LandAmerica brands in Michigan and was with LandAmerica for 34 years.
"Transnation is the largest title provider in Western Michigan — still is," said Reinert.
But for about the last three years, he said, the title insurance industry had been struggling with the serious decline in real estate transactions.
Reinert said the number of transactions is "probably half of what it was five years ago — residential especially."
He said LandAmerica had been spending a lot of time trying to "right size" itself in response to the slowdown.
For the second quarter ending June 30, LandAmerica reported a net loss of $50 million on total revenue of $712 million. Compare that to one year ago: Revenues in the second quarter of 2007were slightly over $1 billion, with net income of $7.9 million.
LandAmerica also had to cut its dividend. The third-quarter dividend this year will be reduced to five cents, compared to the previous dividend of 30 cents.
Reinert saw a potential opportunity in the mortgage industry turmoil.
"Every company has limited resources and I sensed that LandAmerica was more interested in putting its resources to work for them in places like Texas, Arizona, New Mexico, California — the high-growth states," said Reinert.
Last spring, Reinert and some other local LandAmerica executives decided to see if LandAmerica was interested in selling its West Michigan operations. One of those executives was Tom Olson, who had 35 years with LandAmerica and is now executive vice president of Transnation Title Agency of Michigan.
While negotiations were slowly underway, LandAmerica decided to move its title research and storage operations in Zeeland to Ohio. It also had another research/storage facility in Canton, in Southeast Michigan, which it closed.
Reinert said there were about 30 people working in the Zeeland LandAmerica records facility, and "those jobs were going to go down to Ohio."
Then there were the records: LandAmerica's title records in Michigan go back to 1836.
"Those records are invaluable," said Reinert, "especially in commercial work. We have a very large commercial department."
Transnation has always kept its own copies of land transaction legal records because they file them by property description, whereas a register of deeds office files them by names of the property owners. For fast and certain retrieval of all records, title researchers prefer to use the land description.
Reinert and his business associates wanted the West Michigan Transnation records to stay in West Michigan. Eventually they agreed to help pay for the storage cost of the LandAmerica records kept in Zeeland, and pay access fees for their use.
The arrangement saved LandAmerica “a ton of money," said Reinert.
A deal was struck in July and about 25 people kept their jobs, but now they are part of Transnation Title Agency of Michigan, which has a total of 75 employees — 33 of whom own the new network of agencies.
"We wanted to have the owners be employees," said Reinert, because as much as possible, they wanted to avoid outside ownership of the new company.
Primary owners of the company are the members of the eight-person executive team. Another 25 employees also own shares in the company.
The transition for Transnation "has really worked out quite well, because we had an excellent relationship with LandAmerica," said Reinert. The separation from the LandAmerica computer and bookkeeping systems was smooth and gradual.
Becoming a small, independent operation has given the new owners of the Transnation agencies hope for the long run.
"We can operate at a much lower revenue level than LandAmerica because we don't have to support this big Fortune 500 company anymore. We just support ourselves," said Reinert.
According to its Web site, LandAmerica Financial Group Inc. has offices nationwide and customers throughout the United States, Mexico, Canada, the Caribbean, Latin America, Europe and Asia.
Being publicly held and in so many states, it also falls under extensive state and federal regulations, another factor that adds cost and hinders flexibility, noted Reinert.
In early October, Reinert said business seemed to be improving a little bit.
“Of course, right now we have this little thing going on with liquidity. … But the rate of foreclosure seems to be slowing down a little bit, at least here in this part of the world. We're very fortunate to be here in West Michigan." He has had some experience with the mortgage situation in Southeast Michigan. He said that if there is a light at the end of the tunnel there, "it's a longer tunnel" than the one in West Michigan.
Transnation Title Agency of Michigan has offices in Grand Rapids and along the lakeshore.
"We hope to expand into other parts of the state as opportunities arise, and I'm sure they will," said Reinert.
Other executives in the new company besides Reinert and Olson include Bill VanHulle, chief financial officer; Tom Host, vice president, commercial operations; Sharlene Shineldecker, vice president, escrow operations; Steve Barnum, vice president, sales and marketing; and Gary Opper and Edward Tuma, executive consultants.