Title insurer First American Financial Corp posted third-quarter profit that missed market estimates, hurt by higher claims and lower orders.

The Santa Ana, California-based company posted third-quarter profit of $21 million, or 20 cents per share, compared with $33.1 million, or 31 cents, last year.

Analysts, on average, had expected the company to earn 36 cents per share, according to Thomson Reuters I/B/E/S.

Total revenue fell 3 percent to $965 million.

Title insurers guarantee that property owners have title to their property and can legally transfer it. Many lenders now require property buyers to have this insurance before extending loans, to protect them from claims by prior owners.

The company closed 226,600 title orders in the quarter, a fall of 18 percent from a year ago.

First American, which competes with Stewart Information Services Inc and Fidelity National Financial Inc , said it took a $13 million reserve charge in the quarter in connection with a pending lawsuit with Bank of America .

Provision for policy losses and other claims was $69.5 million in the third quarter, up $20 million from the last year.

Shares of the company closed at $13 on Wednesday on the New York Stock Exchange.

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