Realogy Holdings Corp.’s previously announced sale of its title insurance underwriter, Title Resources Guaranty Company, to an affiliate of Centerbridge Partners, L.P., has closed.
For the sale, Realogy received $210 million as well as a 30% equity interest in Closing Patent Holdco, L.P., the newly formed limited partnership joint venture that indirectly owns Title Resources Guaranty Company.
“As we continue to reimagine and deliver a more integrated real estate transaction, today’s closing enables Realogy to be even more focused on our core business, including critical consumer-facing transaction services in franchise, brokerage, title settlement and escrow, and mortgage,” Ryan Schneider, Realogy’s CEO and president, said in a statement.
Centerbridge’s funds purchased a controlling 70% equity interest in the title insurance underwriting joint venture.
Realogy’s portion of future minority interest earnings from its 30% common equity stake will be reported within the company’s Realogy Title Group segment, which includes the company’s title, escrow, and settlement services business, and mortgage origination joint venture.
According to the company’s financial report, Realogy’s national scale title settlement and escrow services closed 220,000 transactions in 2021. The firm’s title and escrow services operate across 44 states under 45 different brand names and in 2021, represented the majority of operating EBITDA generated by the Realogy Title Group segment, excluding the company’s share of equity earnings from its mortgage origination joint venture.
In 2021, the brokerage and franchise conglomerate reported a net income of $343 million, a dramatic turnaround from 2020, when Realogy recorded a $360 million net loss.
Realogy had previously entered into a joint venture with Chicago-based mortgage lender Guaranteed Rate to form Guaranteed Rate Affinity in 2020. During its first year, the joint venture generated $126 million in earnings for Realogy, but in 2021, as the number of homeowners refinancing their mortgages dropped off, that number fell to $49 million.