A new name decorates the skyline at The Mall in Columbia, one that is homegrown.
Fountainhead Title Group, founded in Columbia in 1975, has taken over the former One Columbia Center on the outer rim of The Mall for its headquarters, affixing its name to the side of the building.
The expansion of the state's largest title company occurs during a rapid growth spurt. Fountainhead has more than tripled its business in the past four years and anticipates more growth.
The company plans to open up to seven offices in the next six months, bringing its total to 35, and expects to hire at least 100 people in the next year, said William Yerman, president of the company's Maryland Division. It has hired 146 people this year, he said, bringing its total to 410.
"We're in a market where we need more space," he said. "We've grown at a good time, when the rest of the market needed it."
The company's growth is being propelled by record home sales as interest rates remain at exceptionally low levels.
In 1999, the company handled 8,377 settlements, with revenue of about $8 million. Last year, the company handled 22,000 settlements, and had revenue of $29.8 million. This year, the company expects about 35,000 closings and predicts $40 million in revenue, Yerman said.
James R. Maher of the American Land Title Association said every title company needs to be mindful of its costs, especially when it is growing.
"You have to be wary not to overextend," Maher said. "The current world looks great, but is that the world I'll have to compete in six months and a year from now? You must be careful of your costs, understand your market and be able to jump left or right depending on what way the market demands."
He said real estate purchases and sales, not refinancings, typically drive the market for title companies. But when interest rates rise - as long as the industry doesn't experience sharp recession - title companies will be in demand, especially in this area.
"In a market like some of [the] Baltimore suburbs, which may be somewhat less susceptible to the huge swings we've seen in other places, you might see a slowing of the [sales] pace, but unless we see a 1991 or 1981 recession, people are going to have to buy homes," he said. "Life changes and career changes dictate all kinds of home sale and purchase decisions."
Normally, home sales account for about 90 percent of the company's business, Yerman said. But the hot refinancing business has cut that to about 50 percent to 60 percent this year, he said.
Yerman said Fountainhead has tried to structure itself so that it continues to grow when the market slows. At 25,000 square feet, the new headquarters is 2 1/2 times larger than its predecessor on Broken Land Parkway. It has allowed the company to centralize title searches and processing, several of the company's key divisions, and add training and recruiting. About 90 employees work from the new offices.
Fountainhead has struck deals with real estate brokerages such as Long & Foster and high volume developers to drive title searches - typically required by lenders to ensure no liens or other claims against a property - to its offices. Fountainhead also is guaranteed a recommendation to handle the closing.
In addition, Yerman said the company has taken advantage of favorable lease rates and placed its new satellite offices in outlying, developing areas to help the company profit from home sales. The satellite office leases are short term - three- to five-years, he said.
"When refinances slow, we've worked to establish relationships that will last that are not tied to low interest rates," he said. "We'll be able to do a greater job because our service level will be better when things slow down."
The company plans to expand with offices in Easton and Ocean City, on Maryland's Eastern Shore; Rehoboth Beach, Del.; Northern Virginia and Hanover, Pa., in the next six months. It also hopes to increase its business from home resales in Howard. Though founded here, the company's strongest market is Baltimore County, Yerman said.
"We want to be the dominant player in the marketplace," he said. "We're striving to build the infrastructure to deliver the best service and make the title industry shine."