First American Financial Expects First-Quarter Loss

First American Financial Corp., hurt by the national real estate slump, said Wednesday that it expects to lose money for the first quarter.

First American President Donald P. Kennedy said at the company’s annual meeting that new orders for title insurance began rising sharply in mid-March. That should help push the company back into the black during the second quarter, which ends June 30.

The Santa Ana parent firm of First American Title Insurance Co., the nation’s second-largest title insurer, will likely post quarterly financial results in mid-May.

“It is much too early to make any forecasts about all of 1991, but if current favorable trends continue, we can foresee continuing improvement through the balance of the year,” he said.

It will be a slightly leaner First American, though.

Responding to last year’s real estate downturn, the company began laying off employees, mostly at its title offices throughout the country.

From June through February, the company slashed 807 jobs, reducing its staff by 12.6% to 5,596 employees.

Parker S. Kennedy, the company’s executive vice president and Donald Kennedy’s son, said a number of changes in the company’s operations, including some new managers, should spur the firm’s recovery.

The company’s Florida operations, which he said have been a “big loser” in recent years, should be profitable this year. The long-suffering Texas market already is profitable for the firm, he said.

The elder Kennedy expressed his contempt for the causes of the plummeting real estate market.

“It’s the result of excesses and greed,” particularly in the much-maligned savings and loan industry where some “very bad real estate transactions” were made, he said.

The S&L; debacle, a lack of consumer confidence, the Persian Gulf War and the continued depression in the real estate market, particularly in New England, converged to hammer the title insurance industry in 1990’s final quarter, he said.

“Recent industry and governmental reports show permits for new homes have increased slightly the past two months,” Kennedy said. “But we continue to have concern as to the availability of money to fund the sales.”

First American Title offers title services through a network of more than 5,500 offices or agents in all 50 states, the Bahamas, Bermuda, Canada, Guam, Mexico, Puerto Rico, the Virgin Islands and the United Kingdom. The parent firm also owns First American Trust Co.