A deal by First American Financial Corp. to acquire Contour Software is expected to help the Santa Ana, Calif., title insurer broaden its customer base.
First American said last week it is acquiring Contour, one of the largest producers of mortgage origination software for brokers, for an undisclosed price.
"Until now, First American hasn't found a feasible way to market to smaller mom-and-pop originators and brokers," said Charles F. Gunther, an analyst with Van Kasper & Co., San Francisco. Contour, based in Campbell, Calif., caters mainly to smaller originators and has about 7,000 customers.
First American owns First American Real Estate Information Services, one of the largest providers of information and technology to mortgage bankers.
John Long, president of First American Real Estate Information Services, said the main reason for the deal was to gain access to the broker market.
But he did not rule out the possibility of tinkering with Contour's Mortgage Banking Series software so that it could be marketed to larger originators. "If we want to go in that direction, we would have to customize the system," Mr. Long said.
The acquisition of an origination software producer would give First American another product it can pitch to lenders in its attempt to be a one-stop shop for mortgage technology and data. Contour will be a subsidiary of First American Real Estate.
The real estate information division, based in St. Petersburg, Fla., has credit reporting, property data, flood certification, and appraisal services subsidiaries. In addition, First American Real Estate owns Excelis Inc., a mortgage servicing software company.
First American has an on-line system that lenders can use to order its products. Mr. Long said it will probably take three to six months to integrate Contour into the system.
Contour's employees, including president Scott Cooley, are expected to stay after the deal closes in two to three weeks.
It would be First American Financial's 11th real estate information deal since January 1995, and Mr. Long said the parent is looking for other real estate companies to acquire.
Last December, First American Real Estate Information Services merged with Experian Real Estate Solutions, the real estate information subsidiary of credit information provider Experian Group. First American Financial has an 80% ownership stake in the merged company, and Experian Group owns the remaining 20%.
In May First American Financial acquired Strategic Mortgage Services, an information provider that owns the second-largest property appraiser and third-largest provider of mortgage credit information. u