Corelogic, Inc. – ‘424B3’ on 9/30/98

As of:  Wednesday, 9/30/98   ·   Accession #:  950127-98-374   ·   File #:  333-56521

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Prospectus   —   Rule 424(b)(3)
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 1: 424B3       Rule 424B3 - Supplement                               16±    86K 

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REGISTRATION NO. 333-56521
FILED PURSUANT TO RULE 424(B)(3)
PROSPECTUS                                                  

 3,000,000 COMMON SHARES

THE FIRST AMERICAN FINANCIAL CORPORATION

     This prospectus  (this  "Prospectus")  relates to the offering from time to
time by The First American Financial  Corporation (the "Company"),  a California
corporation, of up to 3,000,000 aggregate amount of its Common shares, $1.00 par
value  (the  "Shares"),  upon  terms to be  determined  at the time of each such
offering.                                                                       

     The Shares are to be offered directly by the Company in connection with the
acquisition  from time to time of the  assets  of, or  ownership  interests  in,
certain entities engaged in the same or similar lines of business as the Company
or any of its subsidiaries. The consideration for such acquisitions will consist
of  Shares,  cash,  notes  or  other  evidences  of  indebtedness,   guarantees,
assumption of  liabilities,  tangible or intangible  property,  or a combination
thereof, as determined from time to time by negotiations between the Company and
the owners or  controlling  persons of the assets or  ownership  interests to be
acquired.                                                                       

     The Company  contemplates that the specific terms of an acquisition will be
determined  by  negotiations  between the Company and the owners or  controlling
persons of the assets or ownership interests to be acquired.  Factors taken into
account in selecting an acquisition  include,  among other relevant factors, the
quality and reputation of the business to be acquired, the assets,  liabilities,
results  of  operations  and cash  flows of the  business,  the  quality  of its
management and employees,  its earnings potential,  the geographic  locations of
the business and the current market value of the Shares. The Company anticipates
that Shares issued in any such  acquisition will be valued at a price reasonably
related to the market  value of the Shares,  either at the time the terms of the
acquisitions are tentatively agreed upon, or at or about the time of closing, or
during the period or periods prior to the delivery of the Shares.               

     The Company does not expect that underwriting discounts or commissions will
be paid,  except that  finders  fees may be paid to persons from time to time in
connection  with specific  acquisitions.  Any person  receiving such fees may be
deemed an  "underwriter"  within the meaning of the  Securities Act of 1933 (the
"Securities Act").                                                              

     Shares issued pursuant to this Prospectus, and any applicable supplement to
this Prospectus (a "Supplement") or post-effective  amendment (a "Post-Effective
Amendment")  may be  reoffered  pursuant  hereto  by the  holders  thereof  (the
"Selling Shareholders") from time to time in transactions on the open market, in
negotiated  transactions,  through  the  writing of  options  on such  Shares or
through a  combination  of such methods of sale,  at  negotiated  prices,  fixed
prices which may be changed,  market  prices  prevailing  at the time of sale or
prices relating to such prevailing prices. See "Selling Shareholders."          

     The  Shares  are  traded on the New York  Stock  Exchange  under the symbol
"FAF." On September  28, 1998,  the closing  price of the Shares on the New York
Stock Exchange was $34.8125.  See "Risk Factors" beginning on page 1 for certain
information that should be considered by prospective  investors before making an
investment in the Shares.                                                       

(cover page continued)                                                          

     THESE  SECURITIES  HAVE NOT BEEN APPROVED OR  DISAPPROVED BY THE SECURITIES
AND  EXCHANGE  COMMISSION  OR  ANY  STATE  SECURITIES  COMMISSION  NOR  HAS  THE
SECURITIES AND EXCHANGE  COMMISSION OR ANY STATE  SECURITIES  COMMISSION  PASSED
UPON THE  ACCURACY OR ADEQUACY OF THIS  PROSPECTUS.  ANY  REPRESENTATION  TO THE
CONTRARY IS A CRIMINAL OFFENSE.                                                 

The date of this Prospectus is September 30, 1998.

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(inside cover page)                                                             

 AVAILABLE INFORMATION

     The Company is subject to the informational  requirements of the Securities
Exchange  Act of 1934,  as  amended  (the  "Exchange  Act"),  and in  accordance
therewith  files  reports,  proxy  statements  and  other  information  with the
Securities  and Exchange  Commission  (the  "Commission").  Such reports,  proxy
statements and other information filed by the Company with the Commission can be
inspected  and  copied at the  public  reference  facilities  maintained  by the
Commission at Room 1024, 450 Fifth Street,  N.W.,  Judiciary Plaza,  Washington,
D.C. 20549; and at the following  Regional  Offices of the Commission:  New York
Regional Office, Seven World Trade Center, 13th Floor, Suite 1300, New York, New
York 10048;  and Chicago  Regional  Office,  Citicorp  Center,  500 West Madison
Street, 14th Floor, Suite 1400,  Chicago,  Illinois  60661-2511.  Copies of such
material can be obtained at prescribed rates from the Public  Reference  Section
of the Commission at 450 Fifth Street, N.W., Judiciary Plaza,  Washington,  D.C.
20549.   The   Commission   also   maintains  a  site  on  the  World  Wide  Web
(http://www.sec.gov)   that  contains   reports,   proxy  statements  and  other
information regarding the Company. In addition,  such reports,  proxy statements
and other information can also be inspected at the offices of the New York Stock
Exchange,  Inc., 20 Broad Street,  New York, New York 10005, on which the Shares
are listed.                                                                     

     This Prospectus  constitutes  part of a Registration  Statement on Form S-4
(the  "Registration  Statement")  filed by the Company with the Commission under
the  Securities  Act.  In  accordance  with the  rules  and  regulations  of the
Commission, this Prospectus does not contain all of the information contained in
the Registration  Statement and the exhibits and schedules thereto.  For further
information  concerning the Company and the Shares offered hereby,  reference is
hereby made to the  Registration  Statement and the exhibits and schedules filed
therewith which may be obtained at the Commission's  offices whose addresses are
listed above. The Registration  Statement has been filed  electronically and may
be obtained at the Commission's Web site listed above. Any statements  contained
herein  concerning the provisions of any document are not necessarily  complete,
and, in each  instance,  reference is made to the copy of such document filed as
an exhibit to the Registration Statement or otherwise filed with the Commission.
Each such statement is qualified in its entirety by such reference.             

 INCORPORATION OF DOCUMENTS BY REFERENCE

     The  documents  listed in (1), (2), (3), (4), (5), (6), (7), (8), (9), (10)
and (11)  below  are  incorporated  by  reference  in this  Prospectus,  and all
documents  filed by the Company with the Commission  pursuant to Sections 13(a),
13(c),  14 and  15(d)  of the  Exchange  Act,  subsequent  to the  date  of this
Prospectus and prior to the  termination  of any offering of securities  made by
this  Prospectus,  shall be  deemed  to be  incorporated  by  reference  in this
Prospectus and to be part hereof from the date of filing of such documents.  Any
statement  contained  herein,  or in a  document  all or a  portion  of which is
incorporated or deemed to be incorporated by reference  herein,  shall be deemed
to be modified or superseded for purposes of this  Prospectus to the extent that
a statement  contained herein or in any other  subsequently filed document which
also  is or is  deemed  to be  incorporated  by  reference  herein  modifies  or
supersedes such statement.                                                      

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(inside cover page continued)                                                   

     Any such statement so modified or superseded shall not be deemed, except as
so modified or superseded, to constitute a part of this Prospectus.   

(1)  The Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1997.                                                             

(2)  The Company's  Quarterly  Report on Form 10-Q for the fiscal  quarter ended
March 31, 1998.                                                       

(3)  The Company's  Quarterly  Report on Form 10-Q for the fiscal  quarter ended
June 30, 1998.                                                        

(4)  The Company's Report on Form 8-K dated January 23, 1998.                   

(5)  The Company's Report on Form 8-K dated January 27, 1998.                   

(6)  The Company's Report on Form 8-K dated March 18, 1998.                     

(7)  The Company's Report on Form 8-K dated March 31, 1998.                     

(8)  The Company's Report on Form 8-K dated April 7, 1998.                      

(9)  The Company's Report on Form 8-K dated June 26, 1998.                      

(10) The  description  of the Shares  contained  in the  Company's  Registration
     Statement on Form 8-A  registering  its Common shares,  par value $1.00 per
  share, under Section 12(b) of the Exchange Act, dated November 19, 1993.

(11) The description of certain Rights to Purchase Series A Junior Participating
     Preferred Shares which may be transferred with the Company's Common shares,
     which description is contained in the Company's  Registration  Statement on
    Form 8-A, under Section 12(b) of the Exchange Act, dated November 7, 1997.

          This  Prospectus  incorporates  documents by  reference  which are not
     presented  herein or delivered  herewith.  These  documents  are  available
     without charge to any person to whom this Prospectus is delivered upon five
     business  days' written or oral request of Mark R Arnesen,  Vice  President
     and Secretary,  The First American  Financial  Corporation,  114 East Fifth
    Street, Santa Ana, California 92701-4642; telephone number (714) 558-3211.

FORWARD-LOOKING STATEMENTS

          Except for historical  information contained in this Prospectus and in
     the documents  incorporated  in this  Prospectus by reference,  the matters
     discussed  herein  and  therein  contain  forward-looking  statements  that
     involve risks and  uncertainties  that could cause actual results to differ
     materially  from  those  suggested  in  the   forward-looking   statements,
     including, without limitation, the effect of economic conditions,  interest
     rates,  market demand,  competition  and other risks detailed herein and in
the Company's other filings with the Commission.                      

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RISK FACTORS

     In  addition  to  the  other  information  contained  in  this  Prospectus,
investors should consider  carefully the following risk factors before making an
investment  in the Shares.  To the extent any of the  information  contained  or
incorporated  by reference in this  Prospectus  constitutes  a  "forward-looking
statement" as defined in Section 21E(i)(1) of the Exchange Act, the risk factors
set forth below are cautionary  statements  identifying  important  factors that
could   cause   actual   results  to  differ   materially   from  those  in  the
forward-looking statement. See "Forward-Looking Statements."                    

Volatility of Share Price                                                       

     The market price of the Shares could be subject to significant fluctuations
in response to  variations  in financial  results or  announcements  of material
events by the Company or its competitors.  Regulatory  changes,  developments in
the real  estate  services  industry  or changes in  general  conditions  in the
economy or the financial markets could also adversely affect the market price of
the Shares.                                                                     

Cyclical Nature of Real Estate Market                                           

     Substantially all of the Company's title insurance, tax monitoring,  credit
reporting,  flood zone determination and property  information  business results
from  resales  and  refinancings  of  real  estate,  including  residential  and
commercial properties, and from the construction and sale of new properties. The
Company's home warranty  business results from residential  resales and does not
benefit from refinancings or commercial  transactions.  Resales and refinancings
of residential properties constitute the major source of the Company's revenues.
Real estate  activity is cyclical in nature and is affected  greatly by the cost
and availability of long term mortgage funds. Real estate activity and, in turn,
the Company's  revenue base,  can be adversely  affected  during periods of high
interest  rates and/or  limited money supply.  However,  this adverse  effect is
mitigated in part by the continuing  diversification of the Company's operations
into areas outside of its traditional title insurance business.                 

Risks Associated with Acquisition Strategy                                      

     As a key component of its growth  strategy,  the Company has pursued and is
pursuing  acquisitions in the real  estate-related  financial services industry.
Certain  risks are  inherent  in an  acquisition  strategy,  such as  increasing
leverage and debt service  requirements and combining disparate company cultures
and facilities,  which could adversely affect the Company's  financial  position
and operating results.  The success of any completed  acquisition will depend in
part on the Company's ability to integrate  effectively the acquired  businesses
into the  Company.  This  process may involve  unforeseen  difficulties  and may
require a  disproportionate  amount of management's  attention and the Company's
financial  and  other  resources.  No  assurance  can be given  that  additional
suitable  acquisition  candidates will be identified,  financed and purchased on
acceptable  terms,  or that  recent  acquisitions  or  future  acquisitions,  if
completed, will be successful.                                                  

Dependence on Key Personnel                                                     

     The success of the Company is dependent upon the continued  services of the
Company's senior management,  particularly its President, Parker S. Kennedy, its
Chairman and Director, D. P. Kennedy, and its Executive Vice President and Chief
Financial Officer,  Thomas A. Klemens.  The loss of the services of any of these
individuals  could have a material  adverse  effect on the  Company's  financial
position and results of  operations.  The Company's  success also depends on its
ability to attract and retain other highly qualified managerial personnel.      

Year 2000 Costs                                                                 

     Currently,  many computer systems and software products are coded to accept
only two digit entries in the date code field.  These date code fields will need
to accept four digit entries to distinguish 21st century dates from 20th century
dates. As a result, many companies' software and computer systems may need to be
upgraded or replaced in order to comply with such "Year 2000" requirements.  The
Company and third  parties with which the Company does business rely on numerous
computer programs in their day-to-day operations.  The Company is evaluating the
Year 2000 issue as it relates to the  Company's  internal  computer  systems and
third  party  computer  systems  with which the Company  interacts.  The Company
expects to incur  internal  staff costs as well as consulting and other expenses
related to these issues; these costs will be expensed as incurred.  In addition,
the  appropriate  course of action  may  include  replacement  or an  upgrade of
certain systems or equipment at a substantial cost to the Company.  There can be
no  assurance  that the Year 2000 issues  will be resolved in 1998 or 1999.  The
Company may incur  significant  costs in resolving its Year 2000 issues.  If not
resolved,  this issue could have a significant  adverse  impact on the Company's
operations.                                                                     

Government Regulation                                                           

     The  title  insurance   industry  is  subject  to  extensive   governmental
regulation.  Applicable laws and their  interpretation  vary from state to state
and are  enforced  with broad  discretion.  There can be no  assurance  that any
review of the Company's operations and business relationships by courts or other
regulatory  authorities will not result in  determinations  that could adversely
affect  the  Company  or that the  regulatory  environment  will not  change  to
restrict the Company's existing or future operations.                           

THE FIRST AMERICAN FINANCIAL CORPORATION

Overview                                                                        

     The  Company  was  organized  in  1894  as  Orange  County  Title  Company,
succeeding to the business of two title abstract  companies  founded in 1889 and
operating in Orange County,  California.  In 1924, the Company commenced issuing
title insurance policies.  In 1986, the Company began a diversification  program
by acquiring and developing  financial service businesses closely related to the
real  estate  transfer  and  closing  process.   The  Company  is  a  California
corporation whose executive offices are located at 114 East Fifth Street,  Santa
Ana, California 92701-4642, and its telephone number is (714) 558-3211.         

     The  Company,  through  its  subsidiaries,  is engaged in the  business  of
providing  real  estate-related  financial  and  informational  services to real
property  buyers and  mortgage  lenders.  The  Company's  products  and services
include  title  insurance,  tax  monitoring,  credit  reporting,  property  data
services,  flood certification,  field inspection services,  appraisal services,
mortgage loan servicing systems, mortgage document preparation and home warranty
services. The Company also provides investment, trust and thrift services.      

     Through  growth and  acquisitions,  the Company  believes it has become the
United  States'   largest   provider  of  real   estate-related   financial  and
informational  services.  The Company has assembled an array of companies which,
together,  provide comprehensive  services to the mortgage industry,  commercial
and residential real estate developers, home buyers and other customers.        

Business Segments                                                               

Title Insurance                                                       

     Title insurance  policies are insured  statements of the condition of title
to real property,  showing priority of ownership as indicated by public records,
as well as  outstanding  liens,  encumbrances  and other matters of record,  and
certain other matters not of public record. Policies are issued based on a title
report  prepared after a search of public  records,  maps, and documents and are
typically issued when a title is transferred.                                   

     Before issuing title  policies,  title insurers seek to limit their risk of
loss by  accurately  performing  title  searches  and  examinations.  The  major
expenses  of a title  company  relate to such  searches  and  examinations,  the
preparation of preliminary  reports or commitments  and the maintenance of title
plants,  and not from  claim  losses  as in the case of  property  and  casualty
insurers.                                                                       

     As of the date of this  Prospectus,  the Company,  through its  subsidiary,
First American Title Insurance Company,  and its other  subsidiaries,  transacts
its title insurance  business  through a network of more than 300 branch offices
and more than 4,000  independent  agents. In 1997, the Company's title insurance
operations generated $1.46 billion in operating revenues.                       

Real Estate Information Services                                      

     In recent years management has developed a strategy to be a "one-stop" real
estate  information  service company.  To this end, in 1991 the Company acquired
what was  believed to be the second  largest tax  service  company,  and in 1995
acquired what were  believed to be, in each case,  the largest  mortgage  credit
reporting  company  and the largest  flood zone  determination  company,  in the
United States.                                                                  

     In general, the Company's real estate information service products generate
higher  margins  than its title  insurance  products.  The  majority  of pre-tax
profits  generated  by the Company from  non-title  business is derived from the
real estate services business,  which generated $45.3 million in pre-tax profits
in 1997 and  $331.4  million in  operating  revenues.  Approximately  29% of the
Company's pre-tax profits in 1997 were derived from its real estate  information
services   businesses.   These  businesses  are  not  regulated  and  hence  not
constrained by dividend statutes  enforceable by the states in which the Company
operates  its title  business or by  constraints  imposed by  California  on the
Company's trust and banking business.                                           

     First American Real Estate Information Services,  Inc. ("FAREIS") has grown
from its tax service  origins  into a  diversified  mortgage  services  company.
FAREIS and its  subsidiaries  serve mortgage  originators,  mortgage  servicers,
title  companies,  real estate  attorneys and  consumers as well as  non-lending
entities.  The business was  initially  established  in 1987 to advise  mortgage
lenders as to the status of tax payments on real property  securing their loans.
The Company's real estate information  services also includes mortgage and other
credit reporting services,  flood zone  determinations,  mortgage loan servicing
systems,   property  inspections,   appraisal  services  and  mortgage  document
preparation.                                                                    

     The tax service business includes both real estate tax reporting as well as
tax  outsourcing  and tax  certification.  The  Company's  tax service  business
reports on  approximately 11 million  properties  annually and is believed to be
the second  largest  provider of tax  services to the real  estate  market.  The
Company works with over 22,000 taxing authorities nationwide.                   

     First American  CREDCO,  Inc.  ("CREDCO"),  the Company's  mortgage  credit
reporting entity, is believed by the Company to be the largest provider of these
services in the United  States and  processes  over 600,000  credit  reports per
month.  CREDCO  provides  residential  mortgage  credit  reports,  prequalifying
reports,  merged credit data,  resident  screening  services,  business reports,
credit scoring tools and personal credit reports.  CREDCO has recently  branched
into the consumer lending and risk scoring areas, providing credit reporting and
information management services to automobile dealers, consumers and home equity
lenders  nationwide.  Approximately  25% of  CREDCO's  1997  revenues  were from
non-real estate related sources.                                                

     The Company is the leading  provider  of flood zone  determinations.  Flood
reporting  services  consist  of  a  broad  range  of  information  required  by
regulatory  agencies  regarding  properties  in  relation to flood  zones.  This
business currently processes over 400,000 flood determinations per month.       

     The  property/field  services business consists of processing single family
home  inspections,  conducting  field  interviews  with  delinquent  mortgagors,
monitoring   the  condition  of   properties   and  assuring   timely   property
preservation.  The Company's  acquisition  in December  1996 of Ward  Associates
places the Company among the leaders in this business.                          

     The appraisal  services  business  utilizes  leading  technology to provide
national  mortgage  lenders  with  property-relative   value  assessments.   The
appraisal  services business operates  throughout the United States.  Electronic
appraisals are supplemented with qualified local appraisers.                    

     In April 1996,  the Company  acquired the Excelis  Mortgage Loan  Servicing
System  ("Excelis  MLS"),  now known as  Excelis,  Inc.  Excelis MLS is the only
commercially   available  real-time  on-line  servicing  system  that  has  been
developed since 1990 to meet  increasingly  sophisticated  market  demands.  The
software employs rules-based technology, which enables the user to customize the
system to fit its individual servicing criteria and policies.                   

     In May 1997,  the Company  purchased  all of the  operations  of  Strategic
Mortgage  Services,  Inc.  ("SMS"),  other than SMS's  flood zone  determination
business.  SMS is a leading provider of real estate information  services to the
U.S. mortgage and title insurance  industries.  The acquired  businesses include
SMS's credit division,  which the Company believes is the third largest provider
of U.S. mortgage credit information;  SMS's property appraisal  division,  which
the Company believes is the second largest provider of U.S. appraisal  services;
SMS's title division,  which provides title and closing services  throughout the
United States, servicing primarily second mortgage originators; SMS's settlement
services business,  which provides title plant systems and accounting  services,
as well as escrow closing  software,  to the title  industry;  and a controlling
interest in what is believed by the Company to be the largest mortgage  document
preparation firm.                                                               

     On January 1, 1998,  the Company and its real  estate  information  service
subsidiaries   (other  than  Excelis   Inc.)  (the  "Real   Estate   Information
Subsidiaries")  consummated a joint venture with Experian Information Solutions,
Inc.  ("Experian"),  pursuant to which First American Real Estate  Solutions LLC
("FARES") was established.  Under the joint venture, the Real Estate Information
Subsidiaries  contributed  substantially  all of their assets and liabilities to
FARES  in  exchange  for an 80%  ownership  interest  and  Experian  transferred
substantially  all of the assets and  liabilities  of its Real Estate  Solutions
division ("RES") to FARES in exchange for a 20% ownership interest.  The Company
believes  that RES is the nation's  foremost  supplier of core real estate data,
providing,   among  other  things,   property   valuation   information,   title
information,  tax  information and imaged title  documents.  As a result of this
joint venture,  the Company believes that FARES is the nation's largest and most
diverse provider of information  technology and decision  support  solutions for
the mortgage and real estate  industries.  See also the Company's Report on Form
8-K dated January 27, 1998, which is incorporated by reference herein.          

     On April 16,  1998,  the Company  acquired  Contour  Software,  the largest
supplier of mortgage origination software to the mortgage loan industry.        

     On June 3, 1998, the Company acquired Data Tree Corporation,  a supplier of
database   management  and  document   imaging  systems  to  county   recorders,
governmental  agencies and the title industry.  See also the Company's Report on
Form 8-K dated March 31, 1998 and incorporated by reference herein.             

Home Warranty                                                         

     The  Company  currently  owns 89.6% of its home  warranty  business,  First
American Home Buyers Protection Corporation ("Home Buyers"),  with the remaining
balance  owned by current and former  management  of this  subsidiary.  The home
warranty business issues one-year  warranties which protect  homeowners  against
defects in household systems and appliances such as plumbing, water heaters, and
furnaces.  The warranties  issued are for household systems and appliances only,
not for the homes  themselves.  The Company's home warranty  business  currently
operates in certain  counties of Arizona,  California,  Nevada,  North Carolina,
South Carolina, Texas, Utah and Washington. The Company's home warranty business
is one of the largest in the United  States  based on contracts  under  service,
with $46.9 million in operating revenues in 1997.                               

Trust and Thrift                                                      

     Since 1960,  the Company has conducted a general trust business in Southern
California.  In 1985,  the Company  formed a banking  subsidiary  into which its
subsidiary  trust  operation  was merged.  As of December  31,  1997,  the trust
operations  were  administering  fiduciary and custodial  assets having a market
value in excess of $1.3 billion.                                                

     During 1988, the Company, through a majority owned subsidiary,  acquired an
industrial loan corporation (the "Thrift") that accepts thrift deposits and uses
deposited funds to originate and purchase loans secured by commercial properties
in Southern  California.  The loans made by the Thrift currently range in amount
from $20,000 to $1,105,000,  with an average loan balance of $270,500. Loans are
made only on a secured basis, at loan-to-value  percentages no greater than 75%.
The Thrift  specializes  in making  commercial  real estate loans and  financing
commercial  equipment leases. In excess of 93% of the Thrift's loans are made on
a variable rate basis.  The average  yield on the Thrift's loan  portfolio as of
December 31, 1997, was 11%. The Thrift's  average loan is 60 months in duration.
Current  deposits  total  $62.5  million  and the loan  portfolio  totals  $65.5
million.                                                                        

Recent Developments                                                   

     On July 31, 1998, the Company acquired ShadowNet Mortgage Technologies, LLC
("ShadowNet"). In connection therewith, the Company issued 291,666 of the Shares
registered  under  the  Registration  Statement.  ShadowNet  is  a  provider  of
electronic  mortgage  document  delivery  systems and will  conduct its business
under the First American Nationwide Documents brand name.                       

     On August 31, 1998, the Company  acquired  First  American Loss  Mitigation
Services,  Inc. ("FALMS").  In connection  therewith,  the Company issued 31,837
Shares registered under the Registration Statement.  FALMS is in the business of
limiting the  liability of a note  holder's  financial  losses on a loan, or the
dollar value of those losses in the event of such  borrower's  default,  through
negotiation  with  the  borrower  for  the  reduction  of  credit   liabilities,
preservation  of  collateral  property,  and  management  and  marketing of such
property.                                                                       

     On August 31, 1998, the Company acquired Executive Reporting Services, Inc.
("ERS") and 75% of the issued and outstanding stock of its affiliate,  CreditNet
Communications,  Inc. ("CNC"). In connection with such transactions, the Company
issued  169,491  Shares and 58,953 Shares,  respectively,  registered  under the
Registration  Statement.   ERS  and  CNC  are  both  mortgage  credit  reporting
companies.                                                                      

     On August 31, 1998, the Company  acquired CIC Inc.  ("CIC").  In connection
therewith,  the Company issued 522,034 Shares  registered under the Registration
Statement.  CIC provides  pre-employment  reporting  services,  including  prior
employment  verification,  criminal  records  searches,  motor vehicle  reports,
credit reports,  educational and  professional  license  verification,  workers'
compensation records, and drug testing, for private and public employers.       

     On September 30, 1998, the Company acquired The Registry,  Inc., Southcoast
Industries,  Inc.,  Trans Registry  Corporations,  Crim Check America,  Inc. and
Trans Registry Limited (each a "Registry  Entity" and collectively the "Registry
Entities").  In  connection  therewith,  the  Company  issued  1,113,579  Shares
registered  under the  Registration  Statement.  The Registry  Entities  provide
landlords with data on prospective tenants in order to allow them to better make
an informed screening  decision;  such data typically includes a report of prior
unlawful   detainer   actions   against  the  prospective   tenant,   employment
verification, a credit report and rental payment history.                       

     On September 30, 1998, the Company acquired substantially all of the assets
of the Kitsap  County,  Jefferson  County and Pacific  County offices of Charter
Title Corporation (the "CTC Businesses").  In connection therewith,  the Company
issued 105,896  Shares  registered  under the  Registration  Statement.  The CTC
Businesses offer title insurance in their respective Washington State counties. 

     On September 30, 1998, the Company acquired all of the outstanding minority
interests in its partially-owned  subsidiary First American Nationwide Documents
LLP  ("FAND").  In  connection  therewith,  the Company  issued  100,158  Shares
registered under the Registration  Statement.  FAND provides  mortgage  document
preparation services.                                                           

Summary Historical Consolidated Financial Data                                  

     The following table sets forth summary  historical  consolidated  financial
and other data for the Company for the five years  ended  December  31, 1997 and
for the quarterly periods ended June 30, 1997 and 1998. The summary is qualified
in its entirety by reference to the financial  statements and other  information
contained  in the  Company's  Annual  Report  on Form  10-K for the  year  ended
December 31, 1997 and  Quarterly  Report on Form 10-Q for the quarter ended June
30, 1998, incorporated by reference herein.                                     

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                                                     Year Ended December 31,                              Six Months Ended     
                                                                                                      June 30,                 

                            ---------------------------------------------------------------------------------------------------
                                 1993           1994            1995          1996            1997          1997           1998

                                                              (Dollars in thousands, except per share data)                    
                                                                                                                               
Income Statement Data:                                                                                                         
Revenues:                                                                                                                      

   Operating revenues      $1,379,781     $1,356,946      $1,227,185     $1,571,168     $1,860,205      $819,872     $1,257,077
   Investment and other                                                                                                        
   income                     $18,645        $19,447         $23,031        $26,398        $27,256       $13,379        $52,255
                           ----------     ----------      ----------     ----------     ----------      --------     ----------
                           $1,398,426     $1,376,393      $1,250,216     $1,597,566     $1,887,461      $833,251     $1,309,332

Expenses:                                                                                                                      
   Salaries and other                                                                                                          
   personnel costs           $397,902       $423,328        $431,984       $531,250       $647,750      $298,599       $418,189
   Premiums retained by                                                                                                        
   agents                    $504,375       $533,598        $413,444       $516,593       $563,137      $251,155       $335,027
   Other operating                                                                                                             
   expenses                  $222,934       $232,532        $257,823       $322,709       $411,319      $175,649       $284,336
   Provision for title losses                                                                                                  
   and other claims          $125,588       $110,230         $90,387        $86,487        $90,323       $41,049        $59,531
   Depreciation and                                                                                                            
   amortization              $16,333         $19,796         $20,790        $27,242       $38,149        $18,141        $28,303
   Interest                   $4,419          $6,267          $6,242         $4,796        $9,994         $3,660         $9,019
   Minority interest          $5,267          $2,944          $2,132         $2,624        $3,676         $1,294        $16,171
                          -----------     ----------      ----------     ----------     ----------      --------     ----------
                          $1,276,818      $1,328,695      $1,222,802     $1,491,701    $1,764,348       $789,547     $1,150,576

Income before premium                                                                                                          
and income taxes            $121,608         $47,698         $27,414       $105,865      $123,113        $43,704       $158,756
Premium taxes                $17,617         $15,453         $13,627        $16,676       $16,904         $8,722         $9,385
                           ---------      ----------      ----------     ----------     ----------      --------     ----------
Income before income                                                                                                           
taxes                       $103,991         $32,245         $13,787        $89,189      $106,209        $34,982       $149,371
Income taxes                 $41,900         $13,300          $6,200        $35,600       $41,500        $13,600        $59,300
                           ---------      ----------      ----------     ----------     ----------      --------     ----------

Income before cumulative                                                                                                       

effect of a change in                                                                                                          
accounting for income        $62,091         $18,945          $7,587        $53,589       $64,709        $21,382        $90,071
taxes                                                                                                                          
Cumulative effect of a                                                                                                         
change in accounting for      $4,200              --              --             --             --            --             --
                           ---------      ----------      ----------     ----------     ----------      --------     ----------
income taxes                                                                                                                   
   Net income                $66,291         $18,945          $7,587        $53,589       $64,709        $21,382        $90,071
Earnings Per Share                                                                                                             
Data:                                                                                                                          
Basic (1)(3)                   $1.30           $0.37           $0.15          $1.04         $1.24          $0.41          $1.69
Diluted (1)(3)                 $1.30           $0.37           $0.15          $1.03         $1.21          $0.40          $1.63


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                                                    December 31,                                                June 30, 
                            -------------------------------------------------------------------------------------------- 
                                 1993           1994            1995          1996            1997                  1998 

                                                              (Dollars in thousands, except per share data)              
                                                                                                                         

Balance Sheet Data:                                                                                                      
Cash and invested assets    $359,127        $368,999        $340,089       $364,620      $411,014                $610,702
Total assets                $786,448        $828,649        $873,778       $979,794    $1,168,144              $1,598,282
Notes and contracts payable  $85,022         $89,600         $77,206        $71,257       $41,973                $145,032
Guaranteed preferred              --              --              --             --      $100,000                $100,000
beneficial interests in the                                                                                              
Company's junior                                                                                                         
subordinated deferrable                                                                                                  
interested debentures                                                                                                    
Total stockholders' equity  $283,718        $292,110        $302,767       $352,465      $411,412                $576,926
Other Data:                                                                                                              
Loss ratio                      9.1%            8.1%            7.4%           5.5%          4.9%                    4.7%
Ratio of debt to total                                                                                                   
capitalization (2)             21.5%           22.1%           19.1%          16.0%          7.3%                   16.0%
Cash dividends per share (3)   $0.11           $0.13           $0.13          $0.15         $0.17                   $0.05


-----------------------                                                         

(1)  Based upon the weighted average number of common shares outstanding.       

(2)  Capitalization   includes  minority   interests  and  junior   subordinated
deferrable interest debentures.                                       

(3)  Adjusted to reflect the  Company's  3-for-1  stock split  effected July 17,
1998.                                                                 

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                                  SELLING SHAREHOLDERS

     The following table sets forth as of the date of this Prospectus,  the name
of each of the Selling Shareholders, the number of Shares that each such Selling
Shareholder  owns as of such date,  the number of Shares  owned by each  Selling
Shareholder  that may be offered for sale from time to time by this  Prospectus,
the number of Shares to be held by each such  Selling  Shareholder  assuming the
sale of all the Shares offered  hereby and, by footnote,  any position or office
held or material  relationship  with the Company or any of its affiliates within
the past three  years  other than as a result of the  ownership  of Shares.  The
Company may amend or supplement  this Prospectus from time to time to update the
disclosure set forth therein.                                                   

                                                        [Enlarge/Download Table]


                                                                Number of                                  
                                      Shares Owned of Record   Shares to be     Shares Owned of Record     
                                      Prior to the Offering   Offered for the   After Completion of the    
                                                                 Selling               Offering            
                                                              Shareholder's                                
Name of  Selling Shareholder          Number      Percentage     Account       Number            Percentage

                                                                                                           
E. Kent Forest (1)                       0            *         188,254          0                  0.00%  
Julie B. Jensen                          0            *          28,519          0                  0.00%  
Kim C. Hills                             0            *           2,481          0                  0.00%  
Jerry W. Burns                           0            *           3,195          0                  0.00%  
Matt L. Evans                            0            *           3,439          0                  0.00%  
Jeff B. Davis                            0            *           1,278          0                  0.00%  
Tom D. Stubbs                            0            *           1,278          0                  0.00%  
Bruce Berg (2)                           0            *         365,424          0                  0.00%  
Joseph Namia                             0            *          78,305          0                  0.00%  
Ann T. Namia                             0            *          78,305          0                  0.00%  
Bruce J. Frey                            0            *          31,837          0                  0.00%  
Charter Title Corporation                0            *         105,896          0                  0.00%  
Lelia A. Hilmer                          0            *             890          0                  0.00%  
Lelia A. Hilmer Family Trust             0            *          88,195          0                  0.00%  
Samuel Trust                             0            *          37,798          0                  0.00%  
Wayne Hilmer                             0           1.1%       642,025          0                  0.00%  
Stephen Rabbitt                          0            *         275,535          0                  0.00%  
Evan Barnett (3)                         0            *          18,778          0                  0.00%  
Nevel DeHart (4)                         0            *          12,803          0                  0.00%  
Catherine MacPhaille (5)                 0            *          37,555          0                  0.00%  
George M. Shanks, Jr. (6)                0            *           6,849          0                  0.00%  
Shanks, Tritter & Associates, P.C. (7)   0            *          93,309          0                  0.00%  


-------------------------------                                                 
*        Less than one percent.                                                 

(1)  Mr. Forest is the  Divisional  President of CNC, a direct,  partially-owned
subsidiary of the Company.                                            

(2)  Mr.  Berg is the  Divisional  President  of  CIC,  a  direct,  wholly-owned
subsidiary of the Company.                                            

(3)  Mr. Barnett is the  Divisional  President of each Registry  Entity,  all of
which are direct, wholly-owned subsidiaries of the Company.           

(4)  Mr.  DeHart is a Senior Vice  President  and Sales Manager of each Registry
    Entity, all of which are direct, wholly-owned subsidiaries of the Company.

(5)  Ms.  MacPhaille is a Senior Vice President and Divisional  Chief  Financial
     Officer of each  Registry  Entity,  all of which are  direct,  wholly-owned
subsidiaries of the Company.                                          

(6)  Mr.  Shanks  is  Chairman  of the  Board of FAND,  a  direct,  wholly-owned
subsidiary of the Company.                                            

(7)  Shanks, Tritter & Associates, P.C. is currently paid a monthly retainer for
legal services by FAND and purchases goods and services therefrom.    

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PLAN OF DISTRIBUTION

     The Shares covered by this  Prospectus may be offered and sold from time to
time  by  the  Selling   Shareholders.   The  Selling   Shareholders   will  act
independently  of the Company in making  decisions  with  respect to the timing,
manner  and price of each sale.  The  Selling  Shareholders  may sell the Shares
being offered hereby on the New York Stock Exchange, or otherwise, at prices and
under terms then  prevailing  or at prices  related to the then  current  market
price,  at  varying  prices or at  negotiated  prices.  The  Shares may be sold,
without limitation, by one or more of the following means of distribution: (a) a
block trade in which the broker-dealer so engaged will attempt to sell Shares as
agent,  but may  position  and  resell a portion  of the block as  principal  to
facilitate the  transaction;  (b) purchases by a broker-dealer  as principal and
resale by such  broker-dealer  for its own account  pursuant to this Prospectus;
(c) a distribution  in accordance with the rules of the New York Stock Exchange;
(d)  ordinary  brokerage  transactions  and  transactions  in which  the  broker
solicits purchasers; and (e) in privately negotiated transactions. To the extent
required,  this Prospectus may be amended and supplemented  from time to time to
describe a specific plan of distribution.                                       

     In connection with  distributions  of the Shares or otherwise,  the Selling
Shareholders may enter into hedging  transactions  with  broker-dealers or other
financial institutions. In connection with such transactions,  broker-dealers or
other  financial  institutions  may  engage in short  sales of the Shares in the
course of hedging  the  positions  they assume with  Selling  Shareholders.  The
Selling  Shareholders  may also sell the  Shares  short and  deliver  the Shares
offered hereby to close out such short positions.  The Selling  Shareholders may
also  enter  into  option or other  transactions  with  broker-dealers  or other
financial institutions which require the delivery to such broker-dealer or other
financial  institution of Shares offered hereby, which Shares such broker-dealer
or other  financial  institution  may resell  pursuant  to this  Prospectus  (as
supplemented or amended to reflect such transaction).  The Selling  Shareholders
may also pledge Shares to a broker-dealer or other financial  institution,  and,
upon a default,  such broker-dealer or other financial  institution,  may effect
sales of the pledged  Shares  pursuant to this  Prospectus (as  supplemented  or
amended to reflect such transaction).  In addition,  any Shares that qualify for
sale  pursuant  to Rule 144 may,  at the option of the holder  thereof,  be sold
under Rule 144 rather than pursuant to this Prospectus.                         

     Any  broker-dealer  participating in such transactions as agent may receive
commissions from the Selling Shareholder and/or purchasers of the Shares offered
hereby (and,  if it acts as agent for the  purchaser  of such Shares,  from such
purchaser).  Usual and  customary  brokerage  fees  will be paid by the  Selling
Shareholder.  Broker-dealers  may agree with the Selling  Shareholder  to sell a
specified number of Shares at a stipulated  price per Share,  and, to the extent
such a  broker-dealer  is  unable  to do so  acting  as  agent  for the  Selling
Shareholder, to purchase as principal any unsold Shares at the price required to
fulfill the broker-dealer commitment to the Selling Shareholder.  Broker-dealers
who acquire Shares as principal may  thereafter  resell such Shares from time to
time in transactions  (which may involve cross and block  transactions and which
may involve sales to and through other broker-dealers, including transactions of
the  nature  described  above) in the  market,  in  negotiated  transactions  or
otherwise  at  market  prices  prevailing  at the time of sale or at  negotiated
prices,  and in  connection  with such  resales may pay to, or receive  from the
purchasers of such Shares commissions computed as described above.              

     In  order  to  comply  with  the  securities  laws of  certain  states,  if
applicable, the Shares will be sold in such jurisdictions only though registered
or licensed  brokers or dealers.  In addition,  in certain states the Shares may
not be sold  unless  they  have been  registered  or  qualified  for sale in the
applicable  state  or  an  exemption  from  the  registration  or  qualification
requirement is available and is complied with.                                  

     The Company has advised the Selling Shareholders that the anti-manipulation
rules of Regulation M under the Exchange Act may apply to sales of Shares in the
market and to the activities of the Selling  Shareholders and their  affiliates.
In addition,  the Company will make copies of this  Prospectus  available to the
Selling Shareholders and has informed them of the need for delivery of copies of
this  Prospectus to purchasers at or prior to the time of any sale of the Shares
offered hereby.  The Selling  Shareholders may indemnify any broker-dealer  that
participates  in  transactions  involving the sale of the Shares against certain
liabilities, including liabilities arising under the Securities Act.            

     At the time a particular offer of Shares is made, if required, a Prospectus
Supplement  will be  distributed  that will set forth the number of Shares being
offered and the terms of the offering,  including  the name of any  underwriter,
dealer or agent,  the  purchase  price paid by any  underwriter,  any  discount,
commission and other item constituting compensation, any discount, commission or
concession allowed or re-allowed or paid to any dealer, and the proposed selling
price to the public.                                                            

     The Company  has agreed to keep the  Registration  Statement  of which this
Prospectus  constitutes a part  effective in respect of Shares  issued  pursuant
thereto  until  the  first to  occur  of (i) the date one year  from the date of
issuance  of such  Shares  and (ii) such time as all of  Shares  offered  by the
Selling  Shareholders  listed  above  have been  sold;  the  Company  intends to
de-register  any of the Shares not sold by the Selling  Shareholders  after such
time.                                                                           

 LEGAL MATTERS

     The  validity  of the Shares  offered  hereby  will be passed  upon for the
Company by White & Case LLP, Los Angeles, California.                           

 EXPERTS

     The financial  statements  incorporated  in this Prospectus by reference to
the Annual Report on Form 10-K for the year ended  December 31, 1997,  have been
so included in reliance on the report of PricewaterhouseCoopers LLP, independent
accountants,  given on the  authority  of said firm as experts in  auditing  and
accounting.                                                                     

   ***

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(outside back cover page)                                                       

No person  has been  authorized  to                                             
give any information or to make any                  Prospectus                 
representation   not  contained  or                                             
incorporated  by  reference in this                                             
Prospectus    or   an    applicable                                             
Supplement   or   Post    Effective                                             
Amendment,  and,  if given or made,             3,000,000 Common Shares         
such information or  representation                                             
must not be  relied  upon as having                                             
been  authorized.  This  Prospectus                                             
does  not  constitute  an  offer to                                             
sell,  or  the  solicitation  of an                                             
offer to buy, any securities  other                                             
than  the  securities  to  which it                                             
relates,  or any  offer  to sell or                                             
the solicitation of an offer to buy                                             
such     securities,     in     any                                             
circumstances  in which  such offer                                             
or    solicitation   is   unlawful.                                             
Neither   the   delivery   of  this                                             
Prospectus  nor any  offer  or sale                                             
made  hereunder  shall,  under  any                                             
circumstances,      create      any                                             
implication  that there has been no                                             
change  in  the   affairs   of  the                                             
Company  since  the date  hereof or                                             
that  the   information   contained                                             
herein  is  correct  as of any time                                             
subsequent to its date.                                                         

__________________________                       THE FIRST AMERICAN     
                                           FINANCIAL CORPORATION

Table of Contents                                                               

Available Information......................(i)                                  
Incorporation of Documents by Reference....(i)                                  
Forward-Looking Statements................(ii)                                  
Risk Factors.................................1                                  
The First American Financial Corporation.....2                                  
Selling Shareholders........................10                                  
Plan of Distribution........................11                                  
Legal Matters...............................12                                  
Experts.....................................12         Dated September 30, 1998 

Dates Referenced Herein   and   Documents Incorporated by Reference

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