To the management team at FNF for joining us. From FNF, we have Mike Nolan, President and CEO, Tony Park is the CFO, and Lisa Foxworthy-Parker, Head of Investor Relations. Before we get started, I'll hand it over to Mike, to make some comments about the cybersecurity issue, and then we can, you know, go from there.
Thanks, Bose. And thanks for joining us today. It's great, it's great to have everybody here. I'm gonna read just some comments around the cybersecurity incident, and we've also filed this as an 8-K this morning, for further reference. As you know, we reported that on November 19th, we became aware of a cybersecurity incident whereby an unauthorized third party accessed certain of our systems and acquired certain credentials and data. We promptly commenced an investigation, retained leading experts to assist the company, notified law enforcement authorities, regulatory authorities, and other stakeholders, and followed our incident response plans, including implementing containment measures. We are continuing to analyze affected data and to further assess our notification obligations. Last week, we reported that the incident was contained on November 26th, and we have since resumed normal operations.
As a reminder, F&G was not impacted by the incident. While we are still assessing the impact of the incident, I would like to note that we have cyber insurance with a $10 million retention, and the period of time that customers experienced disruption was relatively brief, as a portion of that time was over the Thanksgiving holiday weekend. While it is hard to predict any long-term effects, in my view, this incident does not change the longstanding competitive advantages and value add that FNF provides to its customers. FNF remains committed to protecting our client and customer information, and cybersecurity will continue to be a top priority in our technology spend. As challenging as this incident was, it really showcased how our team pulls together, and I would like to thank the FNF team and our advisors who worked so hard to resolve the incident.
I would also like to thank our business partners for working with us as we resolved the matter, our employees in the field, who worked diligently with our customers to minimize the impact of the incident, and the other companies in the industry who reached out and offered their support and assistance. As the investigation is ongoing, we do not plan to comment further on any of the details related to the incident at this time. Thank you, and I'll turn it over to Bose for questions.
Thanks, Mike. Also, just to remind the audience, you can ask questions as well. Just either submit them through the Q&A chat box, or if you raise your hand, I can unmute your mic, and you can just ask the management team directly. So let me just kick it off with a discussion about trends quarter to date. Can you just talk about what you guys are seeing in the quarter on, starting with the residential, just on purchase and refi?
Sure. Sure, Bose, and we're still finalizing kind of November end, but, but I would say that our, our November open orders per day on the residential side are, are in line with our sort of normal seasonal expectations with, you know, the seasonal fall off, just like, just like in October, as we've talked about in the past. And we still think that our November opens for the quarter will be in line with really where we were in the fourth quarter of last year, as we, as we previously talked about. We did have two-three days where our production was limited, due to the incident relative to open and closed orders, and we're still looking at that, to see what, what might be kind of moving into December.
So what we maybe didn't do in November, maybe shows up in December.
Okay. Okay, great. And then just on the residential fee profile trends, can you just discuss, you know, what's happening there as well?
Yeah, Bose, maybe I'll touch on that. I would say generally, it's if there was a word, it would be stable. We haven't seen a lot of movement really all year. It increased a little bit as we went through the first half, stabilized and then, you know, maybe it's down 2% or 3% in the last three months, but still relatively stable in that $3,500-$3,600 range. Now, that's on the purchase side. Refi, it's you know, there's not a lot of volume in refi, frankly, so it's not moving the needle. I think 5% of our revenue the last couple of quarters has been on the residential refinance side. And our refi fee profile is somewhere in the $1,100-$1,200 range.
Okay, great. Then just, yeah, switching over to commercial, can you just talk about, you know, what you're seeing there in terms of the, you know, order trends going into the end of the year?
Yeah, I would say it's just very consistent with expectations and probably what we saw going into this year, you know, similar to what we saw in the fourth quarter of last year. You know, our open orders, as we've commented before in commercial, have just been incredibly consistent for the first three quarters on the average opens per day. And, you know, we typically see some falloff in opens in the fourth quarter in any given year, and I think we're seeing that sort of normal kind of falloff. So we feel good about commercial. We've said for a number of probably quarters now that the expectation was, you know, somewhere in that $1 billionplus in commercial revenue for the year, and I think we're still thinking that we're in that bucket.
Okay, great. And anything you're seeing there in terms of the large transactions or the changes in the mix on commercial?
You know, again, probably more consistency than not with, you know, asset classes like industrial and multifamily still being really steady. The sort of tax advantage transactions around affordable housing and energy are good. And, you know, the energy deals, as we've talked about, they're not as frequent, but they're big. Seeing activity in hospitality, hotel, medical, things like that. We have seen, I would say, a modest uptick in, you know, more distressed-type transactions, but I would describe it as modest, with maybe more loan modification transactions or things like that on the commercial side. There's maybe some view that that'll pick up in 2024, and that actually could be, you know, more activity for the industry if that's the case. I would say more single site than multi-site, this year.
But overall, pretty good commercial market.
Okay, great. Then switching over to margins, you've historically talked about that 15%-20% range. You know, if 2024 ends up being, you know, if this is kind of the run rate for now, I mean, do you think margins, you know, can be at the low end of the range, or how would you kind of characterize, you know, what's the expectations there?
Well, if the question is, you know, if going into 2024, we have similar order volumes and trends, I would say you would look at 2023 as a pretty good guide. We, you know, we had two quarters, the second and third, were over 15%, so we're over the range, but not in the first. And I think through the first nine months, we're at 14.3%. It's just hard in this kind of a low order environment to probably hit that, you know, for four quarters. You know, you still got the issue of getting over the first quarter.
Mm-hmm.
If you go back and look at, you know, maybe the last seven or eight years, or maybe a little bit longer, you know, you would see that, you know, we just haven't been, you know, more like in a 10%-13% range in that first quarter is more normal than not.
Yeah.
You know, we are going into 2024 with maybe a slightly better position on our expense base. I mean, we'll be a little bit smaller-
Mm-hmm.
going into 2024, but I would still say, you know, 2023 is probably a pretty good guide relative to what range we'd be in.
Okay, great. And then just on the margin, can you remind us how your margins look by segment?
Yeah, Bose, I can touch on that. If you're talking about the title businesses within our title segment, direct operations, which you'll remember, it's 1,300 offices around the country that process all of our purchase orders, or primarily all of our purchase orders, as well as local commercial orders and local refinance orders. And so those direct operations had a 24% margin in the third quarter, and year to date, it's about 23% through nine months. And so, that's kind of where we are now. That's up against about 26% in the third quarter of last year, and 26% for the full year last year.
Clearly, it was a stronger market last year, but you know, I would view that as, you know, not, not, not much of a decline, given that the volumes are well down from where we are. Our agency business, you'll recall, we record agency gross versus net, and so the margin's gonna be single digits always. We're just short of 7% in the third quarter versus about 8% in the prior year, third quarter. Year- to- date, similarly in the mid-6s to about the mid-8s in the prior year on agency. Our national commercial units, these are the 20 operations that specialize on the larger commercial deals in the major metropolitan areas.
National commercial margins are in the mid-20s right now, 24% versus low 30s in the third quarter of last year. And that's pretty consistent, whether you look at the third quarter or the full nine months. ServiceLink, I mentioned refi volumes are way well off of what a normal market would be, and well off of last year as well. But you know, ServiceLink refi margins were 14% in the third quarter. Not too bad, because I think it was 0% in Q1. That's up against about the mid-16s in the third quarter of last year. LoanCare, our sub-servicing business, has had a really good year. Their year-to-date margin's almost 17%, so they've had a strong year. Our default businesses are in the low 20s.
Not bad there, but again, not a lot of volume. So, you know, blend all that together, combine that with our shared services, and we did a 16.3% margin versus 17.1% in the third quarter of last year.
Okay, great. That's excellent color. Thanks. Thanks very much.
Mm-hmm.
And then switching over to this investment income, can you just talk about your outlook there? You know, how that sort of ties with any expectations for, you know, what the Fed might do next year?
Yeah, so, we've talked about investment income, and it continues to increase, primarily as short-term rates have increased, and we, as you know, have big balances in short-term money. We've got $1 billion in holding company cash. We've got cash at the insurance company level, also earning, you know, call it the mid-5s, and that was, frankly, that was zero a couple years ago, and so there's been quite a move there. Our 1031 exchange balances, and we share some of those returns with our customers, but still, those 1031 exchange balances are earning probably a net 4% to the company. Those balances have come down this year, and probably will continue to come down because of seasonality as we make our way through the end of the year.
But yeah, I mean, the Fed short-term rates, I would say, have a big impact on our overall investment income. I think we guided to somewhere in the $95 million-$100 million quarterly interest in investment income as we look out over the next three or four quarters. That obviously does not include, F&G.
Okay, great. Actually, there are a couple of questions, so maybe I'll get those done here. So the first one is: Can you estimate the amount of lost business due to the cyber issue as transactions could not have closed due to individuals not able to access your systems?
Yeah, good, good, good question. I don't think we can quantify that just yet. As I said, we had, you know, two-three days where we really were limited in the ability to close. But our people in the field really worked hard to work with the clients to see what could be rescheduled, what could be moved to another day. And I would also note that we resumed operations the last two days of the month, so we probably caught, you know, some of that in November, and, you know, we'll just have to evaluate to see what might have also been moved into even December.
Okay, great. Thanks. And then actually one on F&G. So FNF recently announced that it'll invest $250 million in F&G to support its growth. How should we think about FNF's commitment to maintain stakes in F&G near term and long term?
Yeah, a good question. We can probably both address that. I mean, we basically, I think, laid out our reasoning in our press release, and F&G did as well. And we're seeing tremendous growth and opportunity over at F&G. But as we all know, it takes capital to grow that business, and the opportunities for growth and the returns on that growth have been really strong. And so F&G can source capital. They can source capital through debt and reinsurance and equity raises. The most value they get is through an equity raise, because they can leverage that and add more capital and grow even faster.
And so really, FNF's board had to make a decision, should we continue to have F&G source that capital through third parties, or do we wanna make a commitment to help fund some of that? And so our board determined that, hey, a modest $250 million investment in F&G would allow us to benefit from that growth. As everyone probably appreciates, we have told investors really throughout the year that we were preserving capital because it's been a rough year in the title insurance business.
But we've accumulated roughly $950 million of holding company cash, and $250 million seems modest enough that we can still stand by that preservation of capital focus, but at the same time, make an investment that's going to generate returns, better returns, to FNF versus other alternatives. And so that's really the thinking behind that. Obviously, we haven't done it yet. We haven't announced that we've done it, but we did indicate we expect to have that done in either the fourth quarter or the first quarter.
And actually, have you guys indicated if this, if this is gonna be in the form of debt or equity, this commitment to F&G?
Yeah. So that's, that's going to be determined by the special committees of each of the boards. I would say this, I think, equity is more valuable, to, F&G because they can leverage that, and, and really, you know, assist their growth, more impactfully. So I would, I would guess that it's going to be some form of equity versus some form of debt. So in other words, they would likely get equity treatment from it.
Okay, great. Actually, there's one more extra question here on F&G: As a result of the strength in F&G's performance, does that change the timeline for reducing the stake in F&G?
Yeah, I don't know if it changes the timeline, because we've never laid out the timeline. Whether or if we would reduce the stake in F&G, I think people have brought the question up several times. We've certainly mentioned that preservation of the tax-free spin ability by owning at least 80% of F&G is important to FNF and its board. And we do have a five-year runway, if you will, which began in June of 2020. So June of 2025, we could technically spin it tax-free.
But I will tell you this, and we've mentioned this before, the board's been very pleased at F&G's performance. The complement, really, in terms of total earnings to the organization has been strong. And I think, F&G's share price is getting some recognition that they weren't getting when we first spun out that 15% stub back in December of last year. And so that's all been positive. But again, you know, it's hard to say whether the timeline has changed since it was never really laid out as a particular timeline.
Okay, great. And actually, then does the sale of F&G remain a possibility, and does the long-term investment contract with Blackstone, you know, impact that in any way?
Yeah, I think the sale of F&G is always a possibility. I think we've talked about optionality with respect to that investment, and holding the company for a longer period is one of those options. But I think selling it or merging it with another company, or spinning it tax-free or, you know, there's other options, reinsuring a block, and there's optionality there, as I mentioned, if we were in the mindset to divest. I think the Blackstone contract is a consideration for maybe some buyers, some would-be buyers that may consider that. Impediment might be a strong word because I don't know, it's not an impediment if you have another buyer.
I think Chris and Wendy, and team would tell you that the Blackstone relationship has been phenomenal, and it allows them returns that maybe others aren't getting in the industry. And so I think we would say that the contract itself and the performance has been great. But it is a consideration because it's a long-term contract to manage that portfolio.
Okay, great. Actually, there's one more from the audience. It says, I think it's on the margin, going back to my question on the margin, but it says: Can you clarify, do you expect 2024 to be similar to 2023? Yeah, so that's basically the question: Do you expect 2024 to be similar to 2023?
Yeah, I would say that, we... You know, our view in terms of managing the business is not to base a lot on forecasts and projections just because our experience has been it's very difficult to predict. I think my answer was along the lines of, if it looks like 2023, that's what we would expect. I think there's a range of outcomes for 2024, and some of them could be better than 2023, particularly as rates have moved down. I think we're now down maybe to the low end of the sevens instead of the high end of the sevens in the past, I don't know, 30, 45 days, whatever it's been. And some have a view that rates could come down more in 2024. I think that would be a net positive for our business.
And then we could, we could see more transactional volumes, both in purchase, maybe some refi, and, and commercial. You know, we, we do have some commercial, larger commercial customers, this is more anecdotal information, who have an outlook that, that 2024 could be better than 2023. And I think they're basing that on maybe, rates moderating a bit, and also, valuations getting reconciled, in some of these asset classes that will allow for more transactional volume. So I think there's certainly an argument to be made that 2024 could be better than 2023. And, I—but, but, but... And, and if it is, we'll drive stronger margins.
Okay. Thank you. There's one more question, again, on the margin. When purchase volumes return to normal, why will title margins be higher than 15%, than the 15% historical average?
Was the question why will they be or will they be?
Yeah, why will they, or maybe broadly, will it be, maybe-
Yeah.
If you like, look at it.
Well, I think if you look at our performance in 2019, 2020, and 2021, when we started to get into the midpoint of the range and higher, you know, you had a very strong purchase environment, probably existing home sales in the 5.5 to maybe higher number, a very good refi market, strong commercial. So we kind of had all the segments performing at a high level. And our operating leverage in the business is strong, so our incremental margins on that new revenue are really good, so we get better margins.
I think, you know, if you, if you looked at a case where maybe existing home sales got back in the 5 million plus range, you know, where the, the latest, I think, is that they're maybe 4.5 million on the annualized run rate basis, and you had a, a refi market, doesn't have to be, as high as it was in, in probably 2020 and 2021, but maybe $1 trillion plus in a, in a good commercial market, I think we're, you know, right back into the midpoint of that 15 to 20, 20 range. Again, as I, as I mentioned earlier, our, our expense basis right now in the field is, at least on the personnel side and the number of people we have, really positioned as well to, to drive those stronger margins.
Okay, great. Actually, one more on the cybersecurity, it's a little specific. Also on the topic of FNF's recent cyberattack, can you confirm whether or not any customer data was accessed or compromised? Are you still contracting with Mandiant, which the cyberattackers specifically accused of being a laggard in their response to the breach?
Yeah, I don't think we're in a position to field any questions. I mean, we put the 8-K out there and Mike read the statement, and I think that's all we're prepared to discuss at this point. I mean, if there are material updates, obviously, we'll make those, but I think we're probably not gonna respond to those questions, as we said.
Okay, sounds good. Actually, switching back to a couple of the operational issues, can you discuss target leverage, you know, where it stands now, and then how you think about just the negative AOCI piece? And then just how the, and just on the AOCI, do the rating agencies and kind, other kind of parties kind of look through that, or just how they think about it?
Yeah, we target 20%-30% debt-to-capital ratios on a consolidated basis. I think F&G is more in that 25%, probably a tighter range there. We do carve out AOCI. FNF doesn't have much in AOCI, a much smaller bond portfolio. F&G has a large AOCI. Our rating agencies get that. They understand that. And our credit facility contemplates that AOCI is not part of our 35% peak debt to cap leverage at FNF. And so I think currently we're in the call it 27%-28%, something in that neighborhood at the end of the third quarter, which is very comfortable for us.
Okay, great. And then just switching to buybacks, how should we think about the potential timeline for, you know, the resumption of buybacks?
Yeah, good question. I spoke about capital a little bit earlier. I mean, the dividend is number one on the priority list. We did raise the dividend last month, I guess, about 7%. And board typically looks at that annually, and oftentimes increases that. So that's been a focal point. Also, a focal point has been preserving capital as we make our way through a pretty challenging title insurance market. And, you know, cash, I would say, holding company cash has been pretty stable. As you know, as we work through the year, it hasn't grown. But you know, given that we pay a $500 million dividend annually, and I think it's been good, if not great, capital generation. But we have been on the sidelines on the buyback front.
I think we need to see what the 2024 outlook looks like for us, and we have a feel for it. We think the fourth quarter of this year and the first quarter of next year will look a lot like the prior periods of fourth quarter and first quarter. But we still have to see how that plays out and see if that is true. And then, you know, I think the board will definitely take a look at trends in the spring and see how order counts look and what the backdrop looks like, and then maybe make a different decision with respect to buybacks.
Okay. Just to sort of clarify, if 2024 ends up looking, you know, quite a bit like 2023, would there, could there still be room for buybacks in 2024?
I think there's room for buybacks, but it might also depend on acquisition opportunities that we see there. So, yeah, it's if it looks like 2023, we'll let's call it an even cash generation year. So I think there's a possibility. It might also look, I hate to say it, but it might look like what we think the next year is gonna look like.
Yeah. Yep, yep. Okay. No, that makes sense. And then actually, just, and you kind of touched on this, which is my next question. Just, can you talk about the acquisition landscape, both, you know, within title and other, you know, ancillary areas, and even opportunistic in the past, just when there's been distress, and then anything out there that you guys have seen that's interesting?
Yeah, sure. I'll start, and Tony can add on if he chooses. I would say, you know, first, on sort of the real estate-related or, you know, ancillary side, there's certainly some things we've looked at, but nothing that, you know, we really felt strong enough to do at this point. On the title agent side, it's been relatively quiet in 2023. We've done a handful of deals, they've been pretty small. I think that'll. I would expect that to pick up in 2024. I think 2023's still been a year of, you know, how can you reach a valuation when you have these low volumes? And you might have companies that would be interested in selling, but they're not gonna sell at a historic low valuation.
Mm-hmm.
I think, you know, it's kind of like we talked about commercial real estate. There could be the same element of that that plays out with agent acquisitions.
Okay, great. Actually just a couple of other topics. You know, there was a recent report in the Wall Street Journal noting that the Fannie Mae title program is, I guess, put on hold. I mean, how do you think that's an incremental positive? Do you think, you know, there could be other initiatives like this going forward? Just, you know, curious on your thoughts there.
... Well, we do, and we view that as a welcome development. You know, in our view, it was a misguided effort, what they were proposing, and not just our view, I think a lot of other stakeholders and legislators agreed with that. And I think it does recognize, you know, the value that the title industry brings to the real estate economy. There, I think, still could be, you know, other things that get offered up.
You don't really know, and I think that just emphasizes for us the need to continue to have dialogue really with all stakeholders involved in real estate and the title industry and legislators of the important work we do to protect consumers and others in the real estate buying process, and the real estate records and the broader economy. I think that's something that we just have to through ALTA and industry participants really step up our dialogue.
Okay. And other things like the attorney opinion letters, et cetera, I guess that really has never gotten any traction in the market, has it?
No, not to my knowledge. I haven't heard that. I don't think anyone said that. And again, my view, they've been around a long time. They've never really had much hold in the marketplace, and I think there's probably reasons for that. I just really view it as a lesser product, and no one's... I've not seen anybody put forth any information to me that shows it's less expensive.
Okay, great. And then just anything else on the regulatory front that you're keeping an eye on? And then actually, Texas revisits their premiums every few years, you know, when, you know, that comes up next.
Yeah, I'll start with Texas. Yeah, you're right. I think generally it's about every five years. I don't know if it's always every five years, but the last time they did it was 2019, and we expect a process to begin in 2024. So we'll be working, you know, with the regulators on that. In 2019, there was a modest rate reduction, overall rate reduction, and we don't really know yet what 2024 will look like. Other than that, I'm not aware of any significant thing going on on the regulatory front, but I do give Tony a chance to weigh in.
No, I agree. Nothing... I mean, there's normal things that occur with 50 state regulators, but no, nothing out of the ordinary, nothing concerning.
Great. Let me just remind the audience, you can submit questions through the chat, or just raise your hand, and I can unmute you. A couple of other topics. So there's been meaningful, you know, changes seemingly happening in the realtor landscape, you know, in terms of buyer-agent compensation. Just wanted to get your thoughts on what's happening there, and are there things there that might, you know, change the ecosystem in terms of how, you know, sort of title operates?
Yeah, well, you're right. I mean, there's been these lawsuits. I think there's a number of them going on. At least one judgment, I guess, was rendered in one of them, and certainly creating a lot of conversation, I think, in the broader real estate industry. I guess our view is it's really hard to say how it changes over time. There's going to be an appeals process and all those kinds of things that go on that could elongate what the real change will be. In our view, while this could lead to changes, particularly for buy side agents and commission structures, we really think real estate agents will continue to be sort of the trusted advisor to home buyers and sellers in the home buying process.
Now, it might look differently. There could be more consolidation with agents as a possibility, but even if commissions change for the buy side, I think our view would be that real estate agents continue to play a very important role, and we continue to think every day about how we can provide more value to our real estate agent customers, and by extension, to home buyers and sellers.
Great. Okay, there are no questions. Yeah, let me just switch back to a couple of other topics, actually somewhat surrounding the margin. Just on in terms of the cost-cutting side, can you discuss just, you know, fixed costs versus variable costs? Like what, you know, how you think about that.
Yeah, I can maybe touch on that. If you look at our income statement or you look at the line items, obviously, agent commission is 100% variable with agent premiums, and so that's pretty easy to determine there, and know that as revenue comes down, commissions come down and vice versa. Claim expense provision is generally the same rate over time, and so that works the same way as agent commissions would work. If you look at our personnel costs, it's probably about close to 70% fixed. So in other words, salaries we consider fixed, and payroll taxes associated with salaries, and, you know, insurance to some extent. And the other 30% would be variable costs, like commissions on revenue generation-
... bonuses on profit generation, and taxes associated with those buckets. What we do, and you've heard us talk about this for a long time, knowing that we have such a high personnel fixed cost base, we have to react very quickly to changes in volumes. And that's why we try to convert fixed to variable as quickly as possible if we see, if we see orders trending down. If you turn to our other operating expense line item, which is really probably 25 or 30 different subcategories of expense, those are gonna range really across the board, but it's more of a 50/50.
50% of that is gonna vary with revenue, and 50% of that is pretty much locked in and gonna be fixed, like your office space is fixed until you, you know, make decisions to reduce that over time. Your technology spend is gonna be fixed and probably growing over time. But some of the buckets in there, like your cost of sales relative to maybe some default business or maybe your appraisal business, that's gonna be 100% variable with revenue in those units.
Great. And then actually, can you just remind us where the provision stands and, you know, is there room for that to go down?
Yeah. Provision's been solid at 4.5% of title premiums for really a number of years now. We look at it every quarter or even every month just to see what trends look like. Trends have been very favorable on the paid side of things, and it isn't, it hasn't changed this year. I think we're comfortable certainly where we are at this point. We have a redundancy short of $100 million, but still a sizable redundancy in our reserve balance, but not an immaterial redundancy. I'm sorry, not a material redundancy. But yeah, we I think there's room maybe for it to trend down as losses have trended down over a long period of time.
But we're also mindful of changes in the environment. We experienced, and the industry experienced, higher claims in an economic distress situation that we saw in the financial crisis. And so we had an increase in claims there. And so we wanna, you know, be careful that we're certainly well reserved for anything like that. But we haven't seen anything like that, even with, you know, challenges that we've seen in the last year or so, we've not seen an increase in claims.
Great. And then also, I just wanted to ask about technology spend. So, you know, what is kind of the areas that you guys are focused on there?
Sure. I mean, it's certainly a lot of areas. You know, first, we own SoftPro, which is the technology that we use internally to power our title and closing business. And then it's also the number one used software by independent agents in the industry. So that's a big part of what we do on the technology side, and we're always investing in that to add capabilities, to make it, you know, sort of cutting-edge kind of technology. We built out our digital transaction platform inHere. We continue to invest in that, to add capabilities to that. We've made at least one acquisition that we've added into that platform for content. And then, you know, there are many other areas from title automation.
We have our NextAce ValueCheck companies continue to add to that. Continue to invest in our databases through Property Insight, bringing TitlePoint back in. We're looking at ways we continue to grow our footprint with TitlePoint and Property Insight. And then just, you know, the maintenance of everything we do, obviously inside the organization, just to keep all the technology working and staying current. And I'm probably, I'm probably missing something, Tony, so I don't know if you have anything to add on to that.
Yeah. I mean, I, I think you covered it. I don't have a number. It's a big number. It's, it's a very significant number. It might be $400 million, but that might... You know, I, I-- don't hold me to that because I'm just... As Mike walked through it, I was trying to do the math in my head, but it's, it's significant, the amount of spend. But it's important because it basically runs the company in all those different areas.
Okay, great. Then actually, one, just wanted to... You, you kind of touched on this earlier, but just, I guess, the topic of title disintermediation probably came up a little more a year or two ago when some of the, you know, competitors were talking about it. But just, yeah, any updated thoughts there, you know, things you're seeing in terms of, you know, companies trying to do things differently or, yeah, any color?
Yeah, you know, it is a topic, obviously, that comes up periodically, and we—you know, there's been new entrants that have tried to come in, and maybe it wasn't as successful as they would have liked. You had this idea of a title waiver, and that really didn't go anywhere. I think sometimes disruptors maybe don't understand the real value that's offered up by the title industry and how it works. I think sometimes, it's a bit misguided. The way we think about it, though, is that we've just got to focus on our customers and how do we continue to enhance the value proposition we provide Realtors and lawyers and lenders and builders, attorneys, buyers, and sellers.
If we stay always with that as forefront of our thinking, we think that's the best way not to deal with disruption. I think, again, I mentioned this in an earlier comment, the property records in this country are the bedrock of this country, and it's really the title industry that's preserving that and enhancing that over time. I think that sometimes isn't always in people's view when they think about disruption.
Great. Let me check. Does anyone in the audience have any questions? Feel free to submit it. Okay, I think looks like we're done with questions, and I've largely exhausted mine as well. So thanks very much, guys, for joining us today. Thanks everyone in the audience for joining as well, and have everyone have a good day.
Great. Thank you.