Big, Houston-based title company expands into southwest Texas

February 18, 2007

By Bill Sontag

Feature Writer

As with many financial institutions, real estate agencies, and international trade groups, Stewart Title Guarantee Company, Houston, is expanding title insurance services – and many other products – along the U.S. Mexico border.

Stewart is described on the company’s Web site – www.stewart.com – as a “technology driven, strategically competitive, real estate information and transaction management company.”

The Houston firm’s relationship with Southwest Abstract Company, 115 E. Losoya St., Del Rio, is merely a continuation of a warm, 50-year collaboration. Despite the recent celebration of that golden anniversary, there’s no substance to a circulating rumor that Stewart is angling to own Southwest. “We’re not selling to anyone,” said Blake Lewis, Southwest Abstract vice president, Feb. 5.

Southwest Abstract has been in downtown Del Rio since 1910, Stewart Title got underway in 1893, and neither company has designs on any strategy other than continuing a range of services unique to southwest Texas consumers. But Stewart acted differently in other border cities last month when the company announced the acquisition of Border Title Group of Laredo.

Stewart’s purchase of Border Title included satellite offices in Eagle Pass, Alice, Carrizo Springs, Crystal City and Zapata, expanding on the company’s inventory of 9,500 offices worldwide.

Stewart pledged to retain existing management and staff at all the offices, suggesting the company’s new moniker, Stewart Border Title LLC, was little more than a name change.

Stewart offers a dizzying array of services through a vast network, including courthouse record technologies, flood zone determinations, financial services, GIS mapping, water rights title insurance, and title insurance of several kinds. Among the firm’s list of 22 service categories, one stands out of particular interest along the U.S.-Mexico border.

Mexico title insurance – guaranteeing the accuracy and security of land title to purchasers of land south of the Rio Grande – is not a big revenue generator for Stewart Border Title or Southwest Abstract, but it can be critical to those who need it.

Neither the Eagle Pass nor the Del Rio offices sell title insurance directly, but refer requestor information to the Houston headquarters to effect transactions. “We will tell people that it’s something else we can facilitate for them, but it’s not something we’re actively marketing,” Lewis explained.

International Living magazine lists only two title insurers working in Mexico on behalf of U.S. clients, First American Title Insurance, Dallas, and Stewart Title and Guarantee, Houston.
“We’ve probably had only five inquiries about Mexico land title insurance in the past six months,” Lewis said. “But just knowing what I know in this business, people even remotely thinking about buying real estate in Mexico would be crazy not to have title insurance.”

Arturo De Los Reyes, manager of Stewart Border Title Group, 703 Main St., Eagle Pass agrees with Lewis about the importance of insuring title to land purchases in Mexico. De Los Reyes and eight title insurance associates refer such requests from the United States to the Laredo office of Stewart Border Title, and inquiries from within Mexico are directed to Stewart offices in Mexico City, Monterrey, Guadalajara and Cancun.

“We started doing business over there because of all the international U.S. companies starting up business in Mexico, such as Wal-Mart, H-E-B, Sears, McDonalds, Whataburger, and Burger King,” said De Los Reyes. “All those franchises started looking for the same product in property purchasing that they had [available] in this country, namely to buy insurance to secure their title.”

But, again, when inquiries surface about title insurance in Mexico, De Los Reyes and his staff refer the requests to other offices. In Eagle Pass, his bread-and-butter revenue stream comes from traditional land purchases in the United States.

“We do a lot of commercial and residential title insurance, and ranches are a big part of our work here, too,” said De Los Reyes. “Commercial real estate is doing very well here now, and there are a lot of transactions going on in Eagle Pass for retail sales property.” The office transacts about 1,200 real estate deals annually.

With his Del Rio staff, Lewis hopes to dispel myths about land purchases in Mexico, particularly the persisting notion that Americans – or those without Mexican citizenship in general – are prohibited from buying land there. “People were just never aware that they could, but some of these rules have changed over the last few years,” Lewis said.

Marisol Fuentes, a Mexican attorney with U.S. citizenship working as escrow assistant for Southwest Abstract, explained that Americans have always been able to purchase land in the interior of Mexico. The confusion arises along a narrow strip of land, 100 kilometers or about 60 miles in width, circumnavigating the Mexican border with the U.S. and Guatemala, and inland from Gulf of Mexico and Pacific Ocean shorelines.

Within that perimeter ribbon, Article 27 of the Mexican Constitution of 1917 prohibited sale of land to foreigners, but a 1933 amendment and a 2000 interpretive rule modified the prohibition. The new “special procedure” – entitled fideicomiso, or trusteeship – enables land purchases when handled by Mexican banks acting as trustees for the transaction.

Lewis explained that, historically, property purchases were somewhat protected by “title opinions” rendered by attorneys, and his firm would prepare an abstract of title ownership – rather like a lineage of land possession – on which the opinions were based. “Title insurance came along to protect land purchasers against any missing information in the abstract to the title opinion,” Lewis said.

“Missing pieces of information” are compelling reasons for arranging title insurance today, particularly when buying outside the United States, Lewis explained.