The SEC knows, do you?


I’ve been on a tear lately about how the real estate industry needs to work together to help solve our economic crisis.  Let’s face it.

The economy went south when the housing crisis exploded. And until we get our business back in shape, no one should expect a recovery.

And it all starts with jobs. Too darn many of which have been shipped overseas.

Then low and behold, right there in the public records is this interesting factoid from First American. http://www.sec.gov/Archives/edgar/data/1472787/000119312510063299/d1012ba.htm

They tell the Securities and Exchange Commission in the March 22, 2010 public filing (since they are a publicly traded company on the New York Stock Exchange on page 15 that:

“We utilize lower cost labor in foreign countries, such as India and the Philippines, among others.”

They go on to write:

“Furthermore, the practice of utilizing labor based in foreign countries has come under increased scrutiny in the United States and, as a result, some of FinCo’s  customers may require it to use labor based in the United States. FinCo may not be able to pass on the increased costs of higher priced United States-based labor to its customers.”

Now here’s the kicker: Some folks are requiring First American to provide work done by workers in the US!! Alright!  Can you count yourself among them?  I hope so.

Got questions – don’t take my word for it, read it yourself!

(BTW – First American Financial Corporation, refers to themselves in the filing as “FinCo”)

The company’s full language appears on Page 15 of their filing under their table of Contents and can be read here:

http://www.sec.gov/Archives/edgar/data/1472787/000119312510063299/dex99a.htm#ex99atoc65237_3

FinCo may not be able to realize the benefits of its offshore strategy

We utilize lower cost labor in foreign countries, such as India and the Philippines, among others. These countries are subject to relatively high degrees of political and social instability and may lack the infrastructure to withstand natural disasters. Such disruptions could decrease efficiency and increase FinCo’s costs in these countries. Weakness of the U.S. dollar in relation to the currencies used in these foreign countries may also reduce the savings achievable through this strategy. Furthermore, the practice of utilizing labor based in foreign countries has come under increased scrutiny in the United States and, as a result, some of FinCo’s customers may require it to use labor based in the United States. FinCo may not be able to pass on the increased costs of higher priced United States-based labor to its customers.