HousingWireHousingWire
Title insurance underwriter Title Resources Group (TRG) conducted a round of layoffs on Friday focused on professionals from the agency division of Doma Holdings, the real estate technology company it acquired in March, sources told HousingWire.
The exact number of affected employees remains unclear, though some sources estimate at least 20. The layoffs appear to be part of a broader workforce reduction focused on staff working with independent agents, including sales, audit and support roles, the sources added.
Since acquiring the title insurance business of Doma nine months ago, TRG has reduced the number of independent title agents in Doma’s network by 40% to around 420, a former DOMA associate told HousingWire.
The affected employees were reportedly notified via a meeting invite on Friday morning for calls with human resources and TRG CEO Scott McCall. During the meetings, layoffs effective January 1 were announced, alongside details of a severance package based on years of service at the company.
TRG did not immediately respond to HousingWire’s request for comment.
In March, TRG struck a deal to acquire Doma Holdings for nearly $88 million. The cash sale officially closed in late September. Doma’s underwriting division (DTI) became a subsidiary of TRG. The technology division, which was renamed to Doma Technology LLC. (Doma TechCo), continued to operate as a separately capitalized entity.
As a result, sister companies TRG and Doma Technology have Centerbridge Partners as the largest shareholders. Additionally, through the acquisition, Hudson Structured Capital Management acquired a significant ownership stake in Doma TechCo.
Also due to the transaction, LENX, the strategic investment arm of homebuilder Lennar, has become a minority investor in TRG, joining Anywhere Real Estate, HomeServices of America (a Berkshire Hathaway affiliate) and Opendoor Technologies.
The feeling among some sources is that TRG struck the deal and is doing the layoffs for the Lennar relationship. “When you merge these companies [TRG and Doma], that pushes the percentage of independent businesses down,” the former DOMA affiliate said.
As of the end of June, DOMA reached $139 million in net premiums, down from $146 million a year ago, per Securities and Exchange Commission (SEC) filings. Net losses were at $41 million, down from $78 million in the same period.
DOMA is another example of a company that went public via a special purpose acquisition company during the COVID-19 pandemic, then struggled to become profitable and had to find an alternative.
Doma quickly made a name for itself during the height of the refinance boom in late 2020 and 2021 with its Doma Intelligence platform, which automated large portions of the closing process, including title searches, drastically speeding up the closing process. Its SPAC deal with Capitol Investment Corp. V. in early March 2021 valued the business at $3 billion, including debt.
However, when the market cooled in 2022, Doma floundered. The company underwent two rounds of layoffs in 2022, first cutting 15% of its workforce in May, followed by 40% reduction that resulted in 515 positions being cut in early December 2022. At the time, Doma executives told shareholders these cuts would help it achieve its goal of profitability and positive adjusted EBITDA in 2023.
When it became apparent that these actions were not enough, the company began selling off some of its retail title operations. In May 2023, Williston Financial Group (WFG) acquired multiple Doma retail locations and operations in Northern and Central California. This deal was soon followed by the sales of Doma’s title operations in Texas to Capital Title of Texas, LLC., and its Minnesota, Wisconsin, Illinois, Florida and Indiana operations to Near North Title Group in July and August.
During this time, Doma also announced a massive pivot in its business strategy, in which it would be licensing its instant title underwriting software to mortgage originators and secondary market purchasers.
“Our goal in implementing our new strategy in this way is to not only drive some of the largest single reductions in mortgage-related fees to end-consumers that our industry has ever seen, but also to enable Doma to capture a much larger part of the overall market for mortgage transactions with a much better solution and at a much faster speed than our previous go-to market focus,” Max Simkoff, the CEO of Doma, said during an August 2023 earnings call with investors.
In its final quarter as a publicly traded company in Q1 2024, Doma reported a $20.6 million net loss, which was an improvement over the $42.1 million net loss it recorded in Q1 2023. This improvement came even with Doma’s revenue falling over $2 million year over year, to $66.07 million for the quarter.
