**UNITED
      STATES SECURITIES AND EXCHANGE COMMISSION**


**Washington,
      D.C.  20549**





**FORM
      10-Q**





x
            **QUARTERLY
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF****THE
                SECURITIES EXCHANGE ACT OF 1934**





For
      the
      Quarterly Period Ended June 30, 2007





or





o
            **TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF****THE
                SECURITIES EXCHANGE ACT OF 1934**





For
      the
      transition period from _____________ to _______________





Commission
      File No.: 1-13990





**LANDAMERICA
      FINANCIAL GROUP, INC.**


(Exact
      name of registrant as specified in its charter)





**Virginia**
            
            **54-1589611**(State
                or other jurisdiction of incorporation or organization)
            
            (I.R.S.
                Employer Identification No.)**5600
                Cox Road**
              **Glen
                Allen, Virginia**
            
            **23060**(Address
                of principal executive offices)
            
            (Zip
                Code)





**(804)
      267-8000**


(Registrant's
      telephone number, including area code)





Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding 12 months (or for such shorter period that the registrant was required
      to file such reports), and (2) has been subject to such filing requirements
      for
      the past 90 days.





**Yes**x**No**o





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer or a non-accelerated filer.  See definition of
“accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange
      Act.


**Large
      accelerated filer**x                                                **Accelerated
      filer**o                                    **Non-accelerated
      filer**o





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).


**Yes**o**No**x





Indicate
      the number of shares outstanding of each of the issuer’s classes of common
      stock, as of the latest practicable date.





Common
                Stock, No Par Value
            16,769,870
                shares
            
            July
                27, 2007





**LANDAMERICA
      FINANCIAL GROUP, INC. AND SUBSIDIARIES**








INDEXPage
                No.PART
                I.  FINANCIAL INFORMATIONITEM
                1.
            CONSOLIDATED
                FINANCIAL STATEMENTS:Consolidated
                Balance Sheets
            3Consolidated
                Statements of Operations
            5Consolidated
                Statements of Cash Flows
            6Consolidated
                Statements of Changes in Shareholders’ Equity
            7Notes
                to Consolidated Financial Statements
            8ITEM
                2.
            MANAGEMENT'S
                DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                OPERATIONS
            22ITEM
                3.
            QUANTITATIVE
                AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
            41ITEM
                4.
            CONTROLS
                AND PROCEDURES
            43PART
                II.  OTHER INFORMATIONITEM
                1.
            LEGAL
                PROCEEDINGS
            44ITEM
                1A.
            RISK
                FACTORS
            44ITEM
                2.
            UNREGISTERED
                SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
            44ITEM
                4.
            SUBMISSION
                OF MATTERS TO A VOTE OF SECURITY HOLDERS
            45ITEM
                6.
            EXHIBITS
            46SIGNATURE
            47





2
 **PART
            I.  FINANCIAL
            INFORMATION**
 **ITEM
            1.CONSOLIDATED
            FINANCIAL
            STATEMENTS**


**LANDAMERICA
      FINANCIAL GROUP, INC. AND SUBSIDIARIES**





CONSOLIDATED
      BALANCE SHEETS


(In
      millions)





June
                30,
            
            
            December
                31,2007
            
            
            2006(Unaudited)ASSETSINVESTMENTS:Fixed
                maturities available-for-sale -
                at fair value
                (amortized cost:  2007 -
                $1,090.4;
                2006 -
                $1,267.2)
            
            $
            1,082.9
            
            
            $
            1,275.8Equity
                securities available-for-sale -
                at fair value
                (cost:  2007 -
                $116.1; 2006
                -
                $111.3)
            
            
            123.9
            
            
            
            129.8Fixed
                maturities trading -
                at fair
                value
            
            
            138.5
            
            
            
            -Federal
                funds sold
            
            
            7.4
            
            
            
            50.4Short-term
                investments
            
            
            230.9
            
            
            
            403.0Total
                Investments
            
            
            1,583.6
            
            
            
            1,859.0CASH
            
            
            86.4
            
            
            
            82.5LOANS
                RECEIVABLE
            
            
            585.0
            
            
            
            535.8ACCRUED
                INTEREST RECEIVABLE
            
            
            16.8
            
            
            
            20.2NOTES
                AND ACCOUNTS RECEIVABLE:Notes
                (less allowance for doubtful accounts:  2007 -
                $1.2; 2006
                -
                $1.5)
            
            
            23.4
            
            
            
            19.3Trade
                accounts receivable (less allowance for doubtful accounts:  2007
                -
                $10.6;
                2006 -
                $10.2)
            
            
            146.7
            
            
            
            139.2Total
                Notes and Accounts Receivable
            
            
            170.1
            
            
            
            158.5INCOME
                TAXES RECEIVABLE
            
            
            4.4
            
            
            
            60.4PROPERTY
                AND EQUIPMENT -
                at cost (less
                accumulated depreciation and amortization:  2007 -
                $246.0; 2006
                -
                $224.5)
            
            
            153.3
            
            
            
            164.2TITLE
                PLANTS
            
            
            106.9
            
            
            
            105.0GOODWILL
            
            
            795.6
            
            
            
            783.4INTANGIBLE
                ASSETS (less accumulated amortization:  2007 -
                $89.5; 2006
                -
                $78.2)
            
            
            101.3
            
            
            
            135.2DEFERRED
                INCOME TAXES
            
            
            105.9
            
            
            
            84.1OTHER
                ASSETS
            
            
            243.3
            
            
            
            186.5Total
                Assets
            
            $
            3,952.6
            
            
            $
            4,174.8






See
            Notes
            to Consolidated Financial Statements.
 3


**LANDAMERICA
      FINANCIAL GROUP, INC. AND SUBSIDIARIES**





CONSOLIDATED
      BALANCE SHEETS


(In
      millions, except share amounts)








June
                30,
            
            
            December
                31,2007
            
            
            2006(Unaudited)LIABILITIESPOLICY
                AND CONTRACT CLAIMS
            
            $
            832.4
            
            
            $
            789.1DEPOSITS
            
            
            524.2
            
            
            
            618.2ACCOUNTS
                PAYABLE AND ACCRUED LIABILITIES
            
            
            360.0
            
            
            
            400.0NOTES
                PAYABLE
            
            
            573.2
            
            
            
            685.3DEFERRED
                SERVICE ARRANGEMENTS
            
            
            207.6
            
            
            
            218.6OTHER
            
            
            138.3
            
            
            
            67.8Total
                Liabilities
            
            
            2,635.7
            
            
            
            2,779.0COMMITMENTS
                AND CONTINGENCIESSHAREHOLDERS’
                EQUITYCommon
                stock, no par value, 45,000,000 shares authorized, shares issued
                and
                outstanding:  2007 – 16,772,895; 2006 -
                17,604,632
            
            
            394.9
            
            
            
            465.3Accumulated
                other comprehensive loss
            
            
            (45.7
            )
            
            
            (32.2
            )Retained
                earnings
            
            
            967.7
            
            
            
            962.7Total
                Shareholders’ Equity
            
            
            1,316.9
            
            
            
            1,395.8Total
                Liabilities and Shareholders’ Equity
            
            $
            3,952.6
            
            
            $
            4,174.8





See
            Notes
            to Consolidated Financial
            Statements.
 4


**LANDAMERICA
      FINANCIAL GROUP, INC. AND SUBSIDIARIES**





CONSOLIDATED
      STATEMENTS OF OPERATIONS


THREE
      MONTHS AND SIX MONTHS ENDED JUNE 30, 2007 AND 2006


(In
      millions, except per common share amounts)


(Unaudited)








Three
                Months Ended
              June
                30,
            
            
            Six
                Months Ended
              June
                30,2007
            
            
            2006
            
            
            2007
            
            
            2006REVENUEOperating
                revenue
            
            $
            971.5
            
            
            $
            971.1
            
            
            $
            1,882.8
            
            
            $
            1,873.4Investment
                and other income
            
            
            32.1
            
            
            
            32.5
            
            
            
            62.4
            
            
            
            62.2Net
                realized investment gains (losses)
            
            
            1.4
            
            
            
            (1.5
            )
            
            
            8.4
            
            
            
            (0.6
            )1,005.0
            
            
            
            1,002.1
            
            
            
            1,953.6
            
            
            
            1,935.0EXPENSESAgents’
                commissions
            
            
            364.6
            
            
            
            404.2
            
            
            
            705.0
            
            
            
            787.3Salaries
                and employee benefits
            
            
            316.0
            
            
            
            288.8
            
            
            
            623.8
            
            
            
            565.5General,
                administrative and other
            
            
            199.9
            
            
            
            173.3
            
            
            
            387.4
            
            
            
            341.5Provision
                for policy and contract claims
            
            
            85.2
            
            
            
            50.9
            
            
            
            141.2
            
            
            
            101.3Premium
                taxes
            
            
            11.1
            
            
            
            11.9
            
            
            
            21.2
            
            
            
            22.3Interest
                expense
            
            
            11.2
            
            
            
            9.3
            
            
            
            23.9
            
            
            
            18.9Amortization
                of intangibles
            
            
            5.3
            
            
            
            6.3
            
            
            
            11.3
            
            
            
            12.6Impairment
                of intangible and long-lived assets
            
            
            -
            
            
            
            -
            
            
            
            20.8
            
            
            
            9.7993.3
            
            
            
            944.7
            
            
            
            1,934.6
            
            
            
            1,859.1INCOME
                BEFORE INCOME TAXES
            
            
            11.7
            
            
            
            57.4
            
            
            
            19.0
            
            
            
            75.9INCOME
                TAX EXPENSE
            
            
            3.8
            
            
            
            21.8
            
            
            
            6.4
            
            
            
            26.6NET
                INCOME
            
            $
            7.9
            
            
            $
            35.6
            
            
            $
            12.6
            
            
            $
            49.3NET
                INCOME PER COMMON SHARE
            
            $
            0.48
            
            
            $
            2.13
            
            
            $
            0.74
            
            
            $
            2.92WEIGHTED
                AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
            
            
            16.7
            
            
            
            16.7
            
            
            
            17.0
            
            
            
            16.9NET
                INCOME PER COMMON SHARE ASSUMING DILUTION
            
            $
            0.42
            
            
            $
            2.06
            
            
            $
            0.68
            
            
            $
            2.82WEIGHTED
                AVERAGE NUMBER OF COMMON SHARES OUTSTANDING ASSUMING
                DILUTION
            
            
            19.0
            
            
            
            17.3
            
            
            
            18.6
            
            
            
            17.5CASH
                DIVIDENDS DECLARED PER COMMON SHARE
            
            $
            0.22
            
            
            $
            0.18
            
            
            $
            0.44
            
            
            $
            0.36





See
          Notes to Consolidated Financial Statements.
 5


**LANDAMERICA
      FINANCIAL GROUP, INC. AND SUBSIDIARIES**





CONSOLIDATED
      STATEMENTS OF CASH FLOWS


SIX
      MONTHS ENDED JUNE 30, 2007 AND 2006


(In
      millions)


(Unaudited)


2007
            
            
            2006Cash
                flows from operating activities:Net
                income
            
            $
            12.6
            
            
            $
            49.3Adjustments
                to reconcile net income to cash provided by operating
                activities:Depreciation
                and amortization
            
            
            35.8
            
            
            
            27.7Amortization
                of bond premium
            
            
            3.0
            
            
            
            2.5Impairment
                of intangible and long-lived assets
            
            
            20.8
            
            
            
            9.7Net
                realized investment (gains) losses
            
            
            (8.4
            )
            
            
            0.6Net
                change in fixed maturities trading
            
            
            2.7
            
            
            
            -Deferred
                income tax (benefit) expense
            
            
            (17.0
            )
            
            
            2.4Change
                in assets and liabilities, net of businesses acquired:Accounts
                and notes receivable
            
            
            (6.1
            )
            
            
            (9.6
            )Income
                taxes receivable/payable
            
            
            55.4
            
            
            
            (40.1
            )Accounts
                payable and accrued expenses
            
            
            (38.2
            )
            
            
            (35.5
            )Pending
                trades of fixed maturities trading, net
            
            
            16.0
            
            
            
            -Policy
                and contract claims
            
            
            43.3
            
            
            
            16.4Deferred
                service arrangements
            
            
            (11.0
            )
            
            
            3.8Other
            
            
            3.8
            
            
            
            2.2Net
                cash provided by operating activities
            
            
            112.7
            
            
            
            29.4Cash
                flows from investing activities:Purchases
                of title plant, property and equipment, net
            
            
            (12.7
            )
            
            
            (28.5
            )Purchases
                of businesses, net of cash acquired
            
            
            (5.9
            )
            
            
            (8.7
            )Investments
                in unconsolidated affiliates
            
            
            (0.1
            )
            
            
            (0.8
            )Change
                in cash surrender value of life insurance
            
            
            (1.8
            )
            
            
            (1.7
            )Change
                in short-term investments
            
            
            177.0
            
            
            
            69.2Cost
                of investments acquired:Fixed
                maturities available-for-sale
            
            
            (181.7
            )
            
            
            (230.3
            )Equity
                securities available-for-sale
            
            
            (47.3
            )
            
            
            (14.1
            )Proceeds
                from investment sales or maturities:Fixed
                maturities available-for-sale
            
            
            212.7
            
            
            
            187.3Equity
                securities available-for-sale
            
            
            53.9
            
            
            
            12.4Net
                change in federal funds sold
            
            
            43.0
            
            
            
            (6.3
            )Change
                in loans receivable
            
            
            (54.7
            )
            
            
            (14.3
            )Net
                cash provided by (used in) investing activities
            
            
            182.4
            
            
            
            (35.8
            )Cash
                flows from financing activities:Net
                change in deposits
            
            
            (94.0
            )
            
            
            41.4Proceeds
                from the exercise of stock options
            
            
            2.8
            
            
            
            1.4Tax
                benefit of stock options exercised
            
            
            1.8
            
            
            
            0.6Common
                shares repurchased
            
            
            (81.9
            )
            
            
            (24.6
            )Dividends
                paid
            
            
            (7.6
            )
            
            
            (6.2
            )Proceeds
                from issuance of notes payable
            
            
            10.2
            
            
            
            11.9Payments
                on notes payable
            
            
            (122.5
            )
            
            
            (26.3
            )Net
                cash used in financing activities
            
            
            (291.2
            )
            
            
            (1.8
            )Net
                increase (decrease) in cash
            
            
            3.9
            
            
            
            (8.2
            )Cash
                at beginning of period
            
            
            82.5
            
            
            
            89.1Cash
                at end of period
            
            $
            86.4
            
            
            $
            80.9Non-cash
                investing activities:Transfer
                of fixed maturities from
                available-for-sale to trading
            
            $
            142.6
            
            
            $
            -


See
            Notes
            to Consolidated Financial
            Statements.
 6


**LANDAMERICA
      FINANCIAL GROUP, INC. AND SUBSIDIARIES**





CONSOLIDATED
      STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY


SIX
      MONTHS ENDED JUNE 30, 2007 AND 2006


(In
      millions, except per share amounts)


(Unaudited)











Common
                Stock
            
            
            Accumulated
                Other Comprehensive
            
            
            Retained
            
            
            Total
                Shareholders’Shares
            
            
            Amounts
            
            
            Income
                (Loss)
            
            
            Earnings
            
            
            EquityBALANCE
                – December 31, 2005
            
            
            17.3
            
            
            $
            443.1
            
            
            $
            (42.3
            )
            
            $
            877.7
            
            
            $
            1,278.5Comprehensive
                income:Net
                income
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            49.3
            
            
            
            49.3Other
                comprehensive loss:Net
                unrealized loss on securities – net of tax benefit of $7.9
            
            
            -
            
            
            
            -
            
            
            
            (14.7
            )
            
            
            -
            
            
            
            (14.7
            )34.6Common
                stock retired
            
            
            (0.4
            )
            
            
            (24.6
            )
            
            
            -
            
            
            
            -
            
            
            
            (24.6
            )Stock
                options and incentive plans
            
            
            0.2
            
            
            
            7.1
            
            
            
            -
            
            
            
            -
            
            
            
            7.1Common
                dividends ($0.36/share)
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (6.2
            )
            
            
            (6.2
            )BALANCE
                – June 30, 2006
            
            
            17.1
            
            
            $
            425.6
            
            
            $
            (57.0
            )
            
            $
            920.8
            
            
            $
            1,289.4BALANCE
                – December 31, 2006
            
            
            17.6
            
            
            $
            465.3
            
            
            $
            (32.2
            )
            
            $
            962.7
            
            
            $
            1,395.8Comprehensive
                loss:Net
                income
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            12.6
            
            
            
            12.6Other
                comprehensive (loss) income:Net
                unrealized loss on securities – net of tax benefit of $9.4
            
            
            -
            
            
            
            -
            
            
            
            (17.2
            )
            
            
            -
            
            
            
            (17.2
            )Amortization
                of minimum pension liability – net of tax expense of $2.2
            
            
            -
            
            
            
            -
            
            
            
            3.7
            
            
            
            -
            
            
            
            3.7(0.9
            )Common
                stock retired
            
            
            (1.0
            )
            
            
            (81.9
            )
            
            
            -
            
            
            
            -
            
            
            
            (81.9
            )Stock
                options and incentive plans
            
            
            0.2
            
            
            
            11.5
            
            
            
            -
            
            
            
            -
            
            
            
            11.5Common
                dividends ($0.44/share)
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (7.6
            )
            
            
            (7.6
            )BALANCE
                – June 30, 2007
            
            
            16.8
            
            
            $
            394.9
            
            
            $
            (45.7
            )
            
            $
            967.7
            
            
            $
            1,316.9














See
            Notes
            to Consolidated Financial
            Statements.
 7





**LANDAMERICA
        FINANCIAL GROUP, INC. AND SUBSIDIARIES**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
  **1.           INTERIM
          FINANCIAL INFORMATION**
 
 The
          accompanying unaudited consolidated
          financial statements have been prepared in accordance with accounting principles
          generally accepted in the United States for interim financial information
          and
          with the instructions to Form 10-Q and Rule 10-01 of Regulation
          S-X.  They do not include all information and notes required by
          generally accepted accounting principles for complete financial
          statements.  These statements should be read in conjunction with the
          Consolidated Financial Statements and notes thereto included in the Annual
          Report on Form 10-K of LandAmerica Financial Group, Inc. for the year ended
          December 31, 2006.  In the opinion of management, all adjustments
          (consisting of normal and recurring adjustments) considered necessary for
          a fair
          presentation of this information have been reflected.  Due to the
          seasonal nature of our business, operating results for the interim periods
          are
          not necessarily indicative of results for a full year.
 
 When
          used in these notes, the terms
“LandAmerica,” “we,” “us” or “our” means LandAmerica Financial Group, Inc. and
          all entities included in our Consolidated Financial Statements.
 
 **Recent
          Accounting Pronouncements**
 
 In
          March 2007, the Financial Accounting
          Standards Board (“FASB”) ratified Emerging Issues Task Force (“EITF”) Issue No.
          06-10, *Accounting for Collateral Assignment Split-Dollar Life Insurance
          Arrangements* (“EITF No. 06-10”).  EITF No. 06-10 requires an
          employer to recognize a liability for the postretirement benefit related
          to a
          collateral assignment split-dollar life insurance arrangement in accordance
          with
          either Statement of Financial Accounting Standards (“SFAS”) No. 106 or
          Accounting Principles Board (“APB”) Opinion No. 12 if the employer has agreed to
          maintain a life insurance policy during the employee’s retirement or provide the
          employee with a death benefit.  EITF No. 06-10 also requires an
          employer to recognize and measure an asset based on the nature and substance
          of
          the collateral assignment split-dollar life insurance
          arrangement.  EITF No. 06-10 is effective for fiscal years beginning
          after December 15, 2007 with early adoption permitted.  We have
          determined that the adoption of EITF No. 06-10 will not have a material
          effect
          on our financial statements.
 
 In
          February 2007, FASB issued SFAS No.
          159, *The Fair Value Option for Financial Assets and Financial Liabilities**-**Including
          an amendment of FASB Statement No. 115*(“SFAS No. 159”).  SFAS
          No. 159 provides companies with an option to report selected financial
          assets
          and liabilities at fair value.  Unrealized gains and losses on items
          for which the fair value option has been elected are reported in
          earnings.  SFAS No. 159 is effective as of the beginning of an
          entity’s first fiscal year that begins after November 15, 2007 with early
          adoption permitted.  We are evaluating the effect that the adoption of
          SFAS No. 159 will have on our financial statements.
 8
 In
        September 2006, FASB issued SFAS No.
        158, *Employers’ Accounting for Defined Benefit Pension and Other
        Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106 and
        132(R)* (“SFAS No. 158”).  This standard requires employers to
        recognize the underfunded or overfunded status of a defined benefit
        postretirement plan as an asset or liability in its statement of financial
        position and to recognize changes in the funded status in the year in which
        the
        changes occur through accumulated other comprehensive
        income.  Additionally, SFAS No. 158 requires employers to measure the
        funded status of a plan as of the date of its year-end statement of financial
        position.  The new reporting requirement and related new footnote
        disclosure rules of SFAS No. 158 are effective for fiscal years ending after
        December 15, 2006 and have been adopted.  See Note 7, “Pensions and
        Other Post-Retirement Benefits.”  The new measurement date requirement
        applies for fiscal years ending after December 15, 2008.
 
 In
        September 2006, FASB issued SFAS No.
        157, *Fair Value Measurements*(“SFAS No. 157”).  SFAS No. 157
        defines fair value, establishes a framework for measuring fair value in
        generally accepted accounting principles and expands disclosures about fair
        value measurements. SFAS No. 157 is effective for financial statements issued
        for fiscal years beginning after November 15, 2007 with earlier application
        encouraged.  We are evaluating the effect that the adoption of SFAS
        No. 157 will have on our financial statements.
 
 **2.**
              **EARNINGS
                  PER SHARE**
 
 The
        following table sets forth the computation of basic and diluted earnings
        per
        common share:
 
 Three
                  Months Ended
                June
                  30,
              
              
              Six
                  Months Ended
                June
                  30,2007
              
              
              2006
              
              
              2007
              
              
              2006(In
                  millions, except per common share amounts)Numerator:Net
                  income – numerator for basic and diluted earnings per common
                  share
              
              $
              7.9
              
              
              $
              35.6
              
              
              $
              12.6
              
              
              $
              49.3Denominator:Weighted
                  average shares – denominator for basic earnings per common
                  share
              
              
              16.7
              
              
              
              16.7
              
              
              
              17.0
              
              
              
              16.9Effect
                  of dilutive securities:Convertible
                  debt
              
              
              2.1
              
              
              
              0.5
              
              
              
              1.5
              
              
              
              0.5Employee
                  stock options and restricted stock
              
              
              0.2
              
              
              
              0.1
              
              
              
              0.1
              
              
              
              0.1Denominator
                  for diluted earnings per common share
              
              
              19.0
              
              
              
              17.3
              
              
              
              18.6
              
              
              
              17.5Basic
                  earnings per common share
              
              $
              0.48
              
              
              $
              2.13
              
              
              $
              0.74
              
              
              $
              2.92Diluted
                  earnings per common share
              
              $
              0.42
              
              
              $
              2.06
              
              
              $
              0.68
              
              
              $
              2.82
 
  9
  
 In
        connection with the issuance of the
        3.25 percent Convertible Senior Debt due 2034 (“2004 debentures”), we entered
        into a call option designed to mitigate the potential dilution from the
        conversion of the 2004 debentures.  Under the ten-year term of the
        call option, we may require a counterparty to deliver approximately 2.3 million
        shares of our common stock to us at a price which approximates the conversion
        price of the 2004 debentures.  At June 30, 2007, 942,800 shares under
        the call option were not included in the calculation of diluted earnings
        per
        common share because the effect would be anti-dilutive.
 
 **3.**
              **MERGERS
                  AND ACQUISITIONS**
 
 We
        completed no material acquisitions
        in the first six months of 2007.
 
 On
        September 8, 2006, we completed the
        merger with Capital Title Group, Inc. (“Capital Title”) whereby Capital Title
        became a wholly-owned subsidiary of LandAmerica.  Capital Title
        consists of a title insurance underwriter, several title and escrow agency
        operations, a property appraisal company, a settlement services provider,
        and
        other related companies.  Capital Title services customers primarily
        in Arizona, California and Nevada in addition to providing lender services
        on a
        national basis.  We believe that our merger with Capital Title has
        strengthened our presence in key western states and added scale to the services
        we provide to our mortgage lending customers.
 
 The
        merger with Capital Title was
        accounted for using the purchase method in accordance with FASB SFAS No.
        141,
*Business Combinations*(“SFAS No. 141”)*.*Under the terms of the
        merger agreement, we acquired 100 percent of Capital Title’s common stock for
        approximately $252.6 million which consisted of $202.9 million of cash,
        including direct transaction costs of $3.6 million, and $49.7 million of
        our
        common stock, which represented 775,576 shares.  In recording the
        merger, the value of the 775,576 shares issued was determined based on the
        measurement criteria in EITF 99-12, *Determination of the Measurement Date
        for the Market Price of Acquirer Securities Issued in a Purchase Business
        Combination*.
 
 In
        accordance with SFAS No. 141, the
        cost of the merger was preliminarily allocated to the assets acquired and
        liabilities assumed based on their fair values as of the close of the merger,
        with the amounts exceeding the fair value being recorded as
        goodwill.  As the values of certain assets and liabilities are
        preliminary in nature, they are subject to adjustment as additional information
        is obtained, including, but not limited to, valuation of separately identifiable
        intangibles, property, plant and equipment, title plants, deferred taxes,
        exiting certain contractual arrangements, and the expected plans to rationalize
        the combined workforce. The valuations will be finalized within 12 months
        of the
        close of the merger.  When the valuations are finalized, any changes
        to the preliminary valuation of assets acquired or liabilities assumed may
        result in adjustments to separately identifiable intangibles and goodwill.
        The
        results of operations of Capital Title have been included in our consolidated
        financial statements since the merger date.
  10
  Selected
        unaudited pro forma results of
        operations, assuming the merger had occurred as of January 1, 2006, are set
        forth below:
 
 Three
                  Months Ended
              
              
              Six
                  Months EndedJune
                  30, 2006
              
              
              June
                  30, 2006(In
                  millions, except per common share amounts)Total
                  revenue
              
              $
              1,087.0
              
              
              $
              2,099.1Net
                  income
              
              
              36.1
              
              
              
              45.8Net
                  income per common share
              
              
              2.06
              
              
              
              2.59Net
                  income per common share assuming dilution
              
              
              2.00
              
              
              
              2.52
 
 The
        above pro forma results include
        consultant fees of $3.3 million related to the merger, and do not include
        any
        synergies we expect to realize.  The pro forma results are presented
        for information purposes only and may not be indicative of the operating
        results
        that would have occurred had this merger been consummated as of the beginning
        of
        2006.
 
 **4.           
        INVESTMENTS**
 
 We
        classify our fixed-maturity and
        equity investments as trading or available-for-sale.  Trading
        investments are bought and held principally for the purpose of selling them
        in
        the near term.  All fixed-maturity and equity investments not
        classified as trading are classified as available-for-sale.  During
        first quarter 2007, we transferred $142.6 million of our fixed-maturity
        securities from available-for-sale securities to trading
        securities.  Additionally $2.3 million of unrealized gains on these
        available-for-sale securities which were previously included in accumulated
        other comprehensive income (loss) were reclassified and recorded in the
        consolidated statement of operations caption “Net realized investment
        gains.”  We did not transfer any of our securities between investment
        categories during second quarter 2007.  Trading and available-for-sale
        investments are recorded at fair market value.  Unrealized holding
        gains and losses on trading investments are included in
        earnings.  Unrealized holding gains and losses on available-for-sale
        investments are excluded from earnings and are reported as a separate component
        of accumulated other comprehensive income (loss), net of income taxes, until
        realized.  Realized gains and losses from the sale of
        available-for-sale and trading investments are determined on a
        specific-identification basis.  Dividend and interest income are
        recognized when earned.
 
 On
        January 1, 2007, we adopted the
        provisions of SFAS No. 155, *Accounting for Certain Hybrid Financial
        Instruments, an amendment of FASB Statements No. 133 and 140*(“SFAS No.
        155”).  SFAS No. 155 permits remeasurement for certain financial
        instruments, clarifies which financial instruments are not subject to the
        requirements of Statement No. 133, establishes a requirement to evaluate
        certain
        interests in securitized financial assets, and makes certain amendments to
        Statement No. 140 regarding a qualifying special-purpose entity’s ability to
        hold
  11
  certain
        types of financial instruments.  Our adoption of the provisions of
        SFAS No. 155 did not have a material effect on our financial statements for
        second quarter 2007 or for the first half of 2007.
 
 **5.           INCOME
        TAXES**
 
 Our
        effective income tax rate was 33.5
        percent for the first half of 2007 and 35.0 percent for the first half of
        2006.  The difference in the effective tax rate was due primarily to
        favorable permanent differences and changes in the mix of state tax rates
        relative to state taxable income or loss related to our non-insurance
        subsidiaries.
 
 As
        a result of an audit of the 2003 to
        2004 tax years, the Internal Revenue Service (“IRS”) has proposed certain
        adjustments relating to our tax treatment of agency
        revenue.  Currently, revenue from title policies issued through
        independent agents is recognized when the policies are reported by the agent
        for
        book and tax purposes.  The IRS believes that we are required to
        estimate the income and commissions associated with the sale of policies
        by
        agents during the tax year.  The increased tax liability, which would
        result in an increase in deferred tax assets, is approximately $35
        million.  However, we are disputing the proposed adjustment as we
        continue to believe that our tax treatment of these transactions is correct
        and
        we believe that we will prevail in any dispute with the IRS related to this
        matter.  Accordingly, no interest or penalties have been accrued for
        this proposed IRS adjustment as of June 30, 2007.  We expect to defend
        the matter vigorously through the IRS appeal process and, if necessary, through
        litigation. We do not expect the ultimate resolution of this matter will
        have a
        material adverse effect on our financial condition or results of
        operations.
 
 On
        January 1, 2007, we adopted the
        provisions of FASB Interpretation No. 48*, Accounting for Uncertainty in
        Income Taxes, an interpretation of FASB Statement No. 109* (“FIN 48”) and
        FASB Staff Position FIN 48-1, *Definition of Settlement in FASB
        Interpretation No. 48*(“FSP FIN 48-1”).  FIN 48 prescribes a
        recognition threshold and measurement attribute for the financial statement
        recognition and measurement of a tax position taken or expected to be taken
        in a
        tax return.  FSP FIN 48-1 provides guidance on how an enterprise
        should determine whether a tax position is effectively settled for the purpose
        of recognizing previously unrecognized tax benefits.  At January 1,
        2007, the balance of the unrecognized tax benefits was $4.0
        million.  If recognized, this amount would affect our effective tax
        rate.  We have elected to treat any interest and penalties as tax
        expense in accordance with the provisions of FIN 48.
 
 We
        file tax returns in the US federal
        jurisdiction and various state and foreign jurisdictions.  For federal
        and most state and local taxes, the statute of limitations has expired and
        we
        are no longer subject to examinations by tax authorities for years prior
        to
        2003.
 
 Since
        December 31, 2006, there have
        been no events that have had a material impact on our tax accounts.
 
 It
        is reasonably possible that within
        the next twelve months the amount of unrecognized tax benefits will increase
        as
        a result of tax positions taken during the current period, the nature
        of
  12
  which
        are
        consistent with those unrecognized tax benefits at January 1,
        2007.  The estimated range of the increase is from $1.5 million to
        $1.7 million.
 
 **6.           POLICY
        AND CONTRACT CLAIMS**
 
 We
        review
        our claims experience quarterly, and in conjunction with our outside actuaries,
        evaluate the adequacy of our claims reserve.  We consider factors such
        as historical timing of reported claims and claims payment over the period
        in
        which policies are effective against actual experience by year of policy
        issue
        to determine the amount of claims liability required for each year for which
        policies are outstanding.  We also consider the impact of current
        trends in marketplace activity, including refinance activity (which may shorten
        the time period a policy is outstanding), bankruptcies and individual large
        claims attributable to any particular period in determining the expected
        liability associated with each year.
 
 Based
        on our quarterly review of the
        underlying claims data and trends therein, we have provided for claims losses
        using approximately 9.3 percent and 5.3 percent of operating revenue from
        the
        Title Operations segment for the second quarters of 2007 and 2006, respectively,
        and approximately 7.9 percent and 5.4 percent of operating revenue from the
        Title Operations segment for the first half of 2007 and 2006,
        respectively.  The increase in the claims provision ratio was
        primarily due to an increase in the frequency and severity of claims reported
        for policy years 2004 through 2006 which resulted in upward development for
        those policy years.  The claims provision increased by $33.6 million,
        or $21.8 million after taxes, in second quarter 2007 compared to second quarter
        2006.  Since we are subject to liability on claims for an extended
        period of time, slight changes in current claims experience can have a
        significant effect on the amount of liability required for potential Incurred
        But Not Reported (“IBNR”) claims.  We believe that we have reserved
        appropriately for all reported and IBNR claims at June 30, 2007 based on
        the
        results of the actuarial evaluation and evaluation of any known
        trend.
 
 **7.           PENSIONS
        AND OTHER POST-RETIREMENT BENEFITS**
 
 The
        following presents the estimated
        net pension expense recorded in the financial statements for the three and
        six
        months ending June 30, 2007 and 2006.  The 2007 information is based
        on preliminary data provided by our consulting actuaries.
 
  13
  The
        amounts are as
        follows:
 
 Three
                    Months Ended June 30,Pension
                    Benefits
                
                
                Other
                    Benefits2007
                
                
                2006
                
                
                2007
                
                
                2006(In
                    millions)Components
                    of net pension expense:Service
                    cost
                
                $
                -
                
                
                $
                -
                
                
                $
                0.3
                
                
                $
                0.2Interest
                    cost
                
                
                3.7
                
                
                
                3.6
                
                
                
                0.7
                
                
                
                0.9Expected
                    return on plan assets
                
                
                (4.7
                )
                
                
                (4.5
                )
                
                
                -
                
                
                
                -Amortization
                    of unrecognized transition obligation
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                0.3Recognized
                    prior service cost
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                0.1Recognized
                    loss
                
                
                1.4
                
                
                
                1.8
                
                
                
                -
                
                
                
                0.2Loss
                    due to settlement or curtailment
                
                
                3.0
                
                
                
                1.0
                
                
                
                -
                
                
                
                -Net
                    pension expense
                
                $
                3.4
                
                
                $
                1.9
                
                
                $
                1.0
                
                
                $
                1.7
   Six
                    Months Ended June 30,Pension
                    Benefits
                
                
                Other
                    Benefits2007
                
                
                2006
                
                
                2007
                
                
                2006(In
                    millions)Components
                    of net pension expense:Service
                    cost
                
                $
                -
                
                
                $
                -
                
                
                $
                0.6
                
                
                $
                0.5Interest
                    cost
                
                
                7.3
                
                
                
                7.2
                
                
                
                1.4
                
                
                
                1.8Expected
                    return on plan assets
                
                
                (9.4
                )
                
                
                (9.0
                )
                
                
                -
                
                
                
                -Amortization
                    of unrecognized transition obligation
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                0.6Recognized
                    prior service cost
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                0.2Recognized
                    loss
                
                
                2.9
                
                
                
                3.6
                
                
                
                -
                
                
                
                0.3Loss
                    due to settlement or curtailment
                
                
                3.0
                
                
                
                2.0
                
                
                
                -
                
                
                
                -Net
                    pension expense
                
                $
                3.8
                
                
                $
                3.8
                
                
                $
                2.0
                
                
                $
                3.4
 On
        December 31, 2004, we froze the accumulation of benefits available under
        our
        principal pension plan.
 
 **8.**
              **COMMITMENTS
                  AND CONTINGENCIES**
 
 **General**
 
 We
        are involved in certain litigation
        arising in the ordinary course of our businesses.  Although the
        ultimate outcome of these matters cannot be ascertained at this time and
        the
        results of legal proceedings cannot be predicted with certainty, we believe,
        based on current knowledge,
  14
  that
        the
        resolution of these matters will not have a material adverse effect on our
        financial position or results of operations.
 
 **Litigation
        Not in the Ordinary Course of Business**
 
 On
        June 22, 2004, Gateway Title
        Company, Inc. (“Gateway”), Commonwealth Land Title Company, Inc. and LandAmerica
        Financial Group, Inc. (collectively, “Gateway Plaintiffs”) filed a Complaint,
        subsequently amended by a First Amended Complaint filed June 25, 2004, in
        the
        Superior Court of California, County of Los Angeles, Central District (the
        “Court”), against the Mercury Company and its affiliates Financial Title,
        Alliance Title, Investors Title and various individuals including Joseph
        DiChiacchio, a former manager of LandAmerica (Case No. BC 317441) (collectively,
        “Gateway Defendants”).  The lawsuit claimed substantial monetary and
        punitive damages for unfair competitive business practices in conjunction
        with
        Gateway Plaintiffs’ loss of over 300 employees in California, most of which
        appears to have occurred within an approximately twenty-four month
        period.  On December 13, 2004, Alliance Title Company, Inc., Financial
        Title Company, Inc., Roberto Olivera and Ray Arias filed a Cross-Complaint
        for
        unfair competitive business practices.  On December 13, 2004, Mr.
        DiChiacchio also filed a Cross-Complaint alleging similar claims, including
        back
        wages and additional bonus payments, which Gateway Plaintiffs
        disputed.  After completion of discovery, a jury trial began in early
        May 2006 and resulted in a verdict for Gateway of approximately $8.3
        million.  Judgment was not entered pending resolution of the
        Cross-Complaints.
 
 On
        January 14, 2005, First California
        Title Company, New Century Title Company (“New Century”) and United Title
        Company (collectively, “Capital Title Plaintiffs”) filed a Complaint in the
        Superior Court of the State of California, County of Los Angeles, against
        Financial Title Company, Mercury Companies, Inc. (“Mercury”), Stacy Neves,
        Stephanie Howard, George Willard and Tony Becker (Case  No. BC 327332)
        (collectively, “Capital Title Defendants”).  The lawsuit claimed
        substantial monetary and punitive damages for unfair competitive business
        practices in conjunction with Capital Title Plaintiffs’ loss of approximately 80
        employees in California to Capital Title Defendants over an approximately
        eight
        month period.  The complaint was later amended to include Alliance
        Title Company and Christine De’Martini as named defendants.  On
        September 8, 2006, we completed a merger in which Capital Title Plaintiffs
        became affiliated companies.  A jury trial began on October 17,
        2006.  On December 28, 2006, the jury returned its verdict for Capital
        Title Plaintiffs in the approximate amount of $2 million.  The
        punitive damages phase of the bifurcated trial was held on January 2, 2007
        and
        resulted in a punitive damages award for Capital Title Plaintiffs in the
        approximate amount of $14.6 million.  Judgment was entered on March 8,
        2007. Capital Title Defendants filed several post-trial motions including
        motions for a new trial on the issue of punitive damages.  On March
        22, 2007, the trial court granted Mercury’s motion for new trial on the issue of
        punitive damages.  Having found that the punitive damages awarded by
        the jury in favor of plaintiff New Century violated due process, the trial
        court
        reduced the amount of the punitive damages awarded against Mercury from $11.6
        million to $2.9 million.  On April 18, 2007, the trial court issued a
        Minute Order modifying the previous judgment entered in favor of New Century
        to
        reflect this reduction of punitive damages.  The trial court denied
        similar motions for
  15
  new
        trial
        brought by other Capital Title Defendants.  Accordingly, the total
        amount of punitive damages awarded against Capital Title Defendants, after
        the
        March 22, 2007 order, is $5.9 million.
 
 Voluntary
        mediation beginning on April
        4, 2007 led the parties in both cases to a settlement in July 2007, providing
        for a payment in the amount of $12.5 million by Mercury to LandAmerica and
        the
        resolution of all claims, including but not limited to cross claims, post-trial
        motions and appeals, thus eliminating the necessity for later scheduled trials,
        including the trial on the Cross Complaints, and appeal deadlines.
 
 On
        January 25, 2002, Miles R. Henderson
        and Patricia A. Henderson (“Plaintiffs in the Henderson Suit”) filed a putative
        class action suit (the “Henderson Suit”) against Lawyers Title Insurance
        Corporation (“Lawyers Title”) in the Court of Common Pleas for Cuyahoga County,
        Ohio.  Lawyers Title removed the case to the District Court for the
        Northern District of Ohio on March 6, 2002, and Plaintiffs in the Henderson
        Suit
        amended the complaint on March 8, 2002.  On June 28, 2002, the
        District Court remanded the case to the Court of Common Pleas for Cuyahoga
        County, Ohio.  A similar putative class action suit was filed against
        Commonwealth, by Rodney P. Simon and Tracy L. Simon (“Plaintiffs in the Simon
        Suit”) in the Court of Common Pleas for Cuyahoga County, Ohio on March 5, 2003.
        Plaintiffs in both suits alleged that the defendants had a practice of charging
        original rates for owners title insurance policies when lower, reissue rates
        should have been charged.  Both defendants initially responded by
        demanding that the actions be arbitrated, but on final appeal to the Ohio
        Supreme Court, the Court ruled that arbitration was not required for either
        suit.  On remand to the trial court, Plaintiffs in the Henderson Suit
        are now seeking to have the case certified as a class action on behalf of
        all
        sellers and buyers of residential property in Ohio who paid the higher original
        rate from 1992 to the present. The court has set a class certification hearing
        date of December 6-7, 2007.  Plaintiffs in the Simon Suit are seeking
        to have the case certified as a class action on behalf of all sellers of
        residential property in Ohio, who paid the original rate from 1993 to the
        present, as requested in the original complaint, although no hearing date
        on the
        class certification has been scheduled.  Plaintiffs in both cases have
        demanded an unspecified amount of compensatory damages, declaratory and
        injunctive relief, punitive damages, and attorneys’ fees and
        costs.  These cases are in the early stages, there have been no class
        certifications, and the defendants believe that they have meritorious
        defenses.  At this stage of the litigation, the amount or range of
        loss that could result from an unfavorable outcome cannot be reasonably
        estimated.
 
 On
        September 20, 2004, Kenneth and
        Deette Higgins (“Plaintiffs in the Higgins Suit”) filed a putative class action
        suit (the “Higgins Suit”) against Commonwealth Land Title Insurance Company
        (“Commonwealth”) in the Circuit Court of Nassau County, Florida.  On
        February 3, 2005, Plaintiffs in the Higgins Suit filed an Amended Class Action
        Complaint.  Plaintiffs in the Higgins Suit allege that Commonwealth
        had a practice of charging refinance borrowers higher basic rates for title
        insurance, rather than the lower reissue rates for which they are alleged
        to
        have qualified, and of failing to disclose the potential availability of
        the
        lower rates.  Plaintiffs in the Higgins Suit seek to have the case
        certified as a class action on behalf of all Florida persons or entities
        who
        refinanced their mortgages or fee interests on the identical premises from
        July
        1, 1999 to the present where there was no change in the fee ownership
        and
  16
  who
        were
        charged a premium in excess of the reissue premium.  Plaintiffs in the
        Higgins Suit have demanded an unspecified amount of compensatory damages,
        declaratory relief, attorneys’ fees, costs and pre-judgment
        interest.  This case is in the early stages, there has been no class
        certification, and Commonwealth believes it has meritorious
        defenses.  At this stage of the litigation, the amount or range of
        loss that could result from an unfavorable outcome cannot be reasonably
        estimated.
 
 On
        July
        24, 2006, A. D. Alberton (“Plaintiff in the Alberton Suit”) filed a putative
        class action suit (the “Alberton Suit”) against Commonwealth which is currently
        pending in the United States District Court for the Eastern District of
        Pennsylvania.  A similar putative class action suit was filed against
        Lawyers by Shariee L. De Cooman (“Plaintiff in the De Cooman Suit”) in the Court
        of Common Pleas of Allegheny County, Pennsylvania on or about August 12,
        2005.  On November 1, 2005, Plaintiff in the De Cooman Suit filed an
        Amended Complaint.  Plaintiff in the Alberton Suit alleges that
        Commonwealth charged rates for title insurance in excess of statutorily mandated
        rates and/or failed to disclose to consumers that they were entitled to reduced
        title insurance premiums and seeks to certify a class on behalf of all consumers
        who paid premiums for the purchase of title insurance on Pennsylvania properties
        from Commonwealth at any time during the year 2000 until August 2005 and
        qualified for a discounted refinance or reissue rate discount and did not
        receive such discount.  Plaintiff in the De Cooman Suit alleges that
        Lawyers charged the basic rate rather than a reissue or discounted rate to
        certain consumers and seeks to certify a class on behalf of all owners of
        residential real estate in Pennsylvania who, at any time during the ten years
        prior to August 12, 2005 paid premiums for the purchase of title insurance
        from
        Lawyers, qualified for a reissue or other discounted rate, and did not receive
        such rate.  The court in the Alberton Suit has set a class
        certification hearing date of October 16, 2007.  The trial is
        currently scheduled to commence on January 14, 2008. The court in the De
        Cooman
        Suit has set a class certification hearing date of October 9,
        2007.  Plaintiff in the Alberton Suit has demanded an unspecified
        amount of compensatory damages, declaratory relief, triple damages, restitution,
        pre-judgment and post-judgment interest and expert fees, attorneys’ fees and
        costs.  Plaintiff in the De Cooman Suit has demanded an unspecified
        amount of compensatory damages, punitive damages, triple damages, prejudgment
        interest, and attorneys’ fees, litigation expenses and costs.  These
        cases are in the early stages, there has been no class certification, and
        defendants believe they have meritorious defenses.  At this stage of
        the litigation, the amount or range of loss that could result from an
        unfavorable outcome cannot be reasonably estimated.
 
 We
        are defendants in a number of other
        purported class action cases pending in various states that include allegations
        that certain consumers were overcharged for title insurance and/or related
        services. The dollar amount of damages sought has generally not been specified
        in these cases except for jurisdictional limits.  We intend to
        vigorously defend these actions.
 
 **Regulatory
        Proceedings**
 
 We
        have
        received certain information requests and subpoenas from various regulatory
        authorities relating to our business practices and those of the title insurance
        industry.
  17
  The
        Government Accountability Office released its final report on the title
        insurance industry on April 17, 2007 (the “Report”).  The Report makes
        recommendations regarding federal and state oversight of the title insurance
        industry, including but not limited to, better consumer information,
        consideration of the need for modification to the Real Estate Settlement
        Procedures Act and increased cooperation among regulators.
 
 Various
        states are studying the title
        insurance product, market, pricing, business practices, and potential regulatory
        and legislative changes.  Multiple states, including California,
        Florida, Nevada, New Mexico, New York, Texas, and Washington, are examining
        pricing levels and/or title insurance regulations.  If it is
        determined that prices are not justified, rate changes may be implemented,
        including potential reductions.
 
 Some
        of
        the pricing examinations, like those conducted in Texas and New Mexico, are
        conducted annually or biannually and usually result in adjustments to the
        prices
        we can charge.  Subsequent to the 2004 Texas Title Insurance Biennial
        Hearings in August 2006, the Texas Commissioner of Insurance ordered a rate
        reduction of 3.2 percent effective February 1, 2007.  The Texas
        Department of Insurance has noticed the 2006 Texas Title Insurance Biennial
        Hearings with the rulemaking phase to begin on September 5, 2007 and the
        ratemaking phase to begin on October 16, 2007.  Subsequent to a
        hearing of the New Mexico title rate case concluded on January 18, 2007,
        on July
        20, 2007, the New Mexico Superintendent of Insurance ordered a rate reduction
        of
        6.36 percent and a change in the agent/underwriter split from 80/20 to 84.2/15.8
        effective September 1, 2007.  It is expected that a motion for
        rehearing will be filed by the New Mexico Land Title Association to request
        the
        Superintendent to reconsider the order.  If the Superintendent denies
        the motion for rehearing, the rate order can then be appealed to the New
        Mexico
        Public Regulatory Commission.  If the New Mexico Public Regulatory
        Commission upholds the rate order, it can then be appealed to a New Mexico
        district court, with further appellate review available up to the New Mexico
        Supreme Court.
 
 The
        California Department of Insurance
        (“CA DOI”) submitted to the Office of Administrative Law (“OAL”) proposed
        regulations governing the rating of title insurance and related services
        that
        could impose future rate reductions and filing of mandated statistical plans
        that impose substantially higher costs on title insurance operations in
        California.  On February 21, 2007, OAL disapproved the regulatory
        action for failure to comply with certain standards and requirements and
        on
        February 28, 2007 issued a written decision detailing the reasons for
        disapproval. On June 28, 2007, CA DOI submitted revised regulations to OAL
        that
        would become effective January 1, 2009, and OAL approved the regulations
        on July
        25, 2007 and sent them to the California Secretary of
        State.  LandAmerica and other title companies doing business in the
        California market continue to engage in discussions with the CA DOI regarding
        alternative approaches to the regulations but may pursue an appeal if such
        discussions are unsuccessful.
 
 In
        addition, a number of state
        inquiries have focused on captive reinsurance.  Captive reinsurance
        involves the provision of reinsurance by a reinsurance company that is owned
        by
        another entity, typically a lender, developer or other party that is a provider
        of real estate-related services.  From the inception of our captive
        reinsurance programs in 1997 through 2004, reinsurance premiums paid by us
        to
        captive reinsurers totaled approximately $12.0
        million.  The
  18
  revenues
        from these programs were not material to our results of
        operations.  We voluntarily terminated our captive reinsurance
        arrangements as of February 2005, notwithstanding our belief that we had
        operated the programs in accordance with applicable law.  We settled
        these investigations with six states, representing approximately 81.4 percent
        of
        our captive reinsurance business, without admitting any liability.
 
 In
        June 2005, we established reserves
        of $19.0 million to cover anticipated exposure to regulatory matters nationwide,
        an amount which includes settlements with the California, Arizona, Nevada,
        Virginia, Colorado, and North Carolina departments of
        insurance.  Based on these settlements and the status of inquiries, we
        released $6.7 million of this reserve back into earnings in fiscal year 2005
        and
        $0.8 million in fiscal year 2006.  The remaining reserve at June 30,
        2007 was approximately $1.9 million.
 
 We
        may
        receive additional subpoenas and/or requests for information in the future
        from
        state or federal government agencies.  We will evaluate, and we intend
        to cooperate in connection with, all such subpoenas and requests.
 
 Based
        on the information known to
        management at this time, it is not possible to predict the outcome of any
        of the
        currently pending governmental inquiries and investigations into the title
        insurance industry’s market, business practices, pricing levels, and other
        matters, or the market’s response thereto.  However, any material
        change in our business practices, pricing levels, or regulatory environment
        may
        have an adverse effect on our business, operating results and financial
        condition.
 
 **Other
        Commitments and Guarantees**
 
 We
        had guarantees of indebtedness of
        others of approximately $2.2 million at June 30, 2007 and approximately $3.4
        million at December 31, 2006.
 
 **9.**
              **SHAREHOLDERS’
                  EQUITY**
 
 In
        October 2005, the Board of Directors
        approved a share repurchase program expiring in July 2007 (the “2005 Program”)
        that authorized us to repurchase 1.25 million shares of our common
        stock.  Under the 2005 Program, we repurchased 375,000 shares during
        the first six months of 2006 for $24.6 million, at an average cost of $65.49
        per
        share; we repurchased 243,000 shares during the second half of 2006 for $15.6
        million, at an average cost of $64.06 per share.  During the first
        three months of 2007, we repurchased 569,000 shares for $39.9 million, at
        an
        average cost of $70.18 per share.  As of March 31, 2007, there were no
        authorized shares remaining under the 2005 Program.
 
 In
        February 2007, the Board of
        Directors approved a share repurchase program expiring in October 2008 (the
        “2007 Program”) that authorized us to repurchase 1.5 million shares of our
        common stock.  Under the 2007 Program, we repurchased 474,000 shares
        during second quarter 2007 for $42.0 million, at an average cost of $88.54
        per
        share.  At June 30, 2007, there were approximately 1,026,000
        authorized shares remaining under the 2007 Program.
  19
  Effective
        April 1, 2007, our 3.25
        percent convertible senior debentures due 2034 became convertible to common
        stock during second quarter 2007 through and including June 30,
        2007.  These debentures are also convertible during third quarter 2007
        through and including September 30, 2007.  The 2004 debentures are
        convertible into shares of our common stock at a current conversion rate
        of
        18.6733 shares per $1,000 principal amount of the 2004 debentures, which
        is
        equivalent to a conversion price of approximately $53.55 per share of common
        stock.
 
 Effective
        July 1, 2007, our 3.125
        percent convertible senior debentures due 2033 became convertible to common
        stock during third quarter 2007 through and including September 30,
        2007.  The 2003 debentures are convertible into shares of our common
        stock at a current conversion rate of 15.1573 shares per $1,000 principal
        amount
        of the 2003 debentures, which is equivalent to a conversion price of
        approximately $65.97 per share of common stock.
 
 **10.**
              **IMPAIRMENT
                  OF INTANGIBLE AND OTHER LONG-LIVED
                  ASSETS**
 
 We
        became aware that one of our tax and
        flood processing customers, Fremont General Corporation, received a cease
        and
        desist order from the Federal Deposit Insurance Corporation relating to lending
        practices in its mortgage origination business.  As a result of this
        probable loss of business from this customer, we conducted an impairment
        test of
        LandAmerica Tax and Flood Services, Inc.’s customer relationship intangible
        asset in accordance with SFAS No. 144, *Accounting for the Impairment or
        Disposal of Long-Lived Assets.*On April 10, 2007, we determined
        it was probable that LandAmerica Tax and Flood Services, Inc.’s customer
        relationship intangible was impaired.  Additionally, we conducted an
        impairment test of the Lender Services segment’s goodwill balance in accordance
        with SFAS No. 142, *Goodwill and Other Intangible Assets,* before its
        annual testing date of October 1, 2007, as the probable loss of business
        was
        deemed to be an indicator of potential impairment.  In first quarter
        2007, we recorded a customer relationship intangible impairment charge of
        $20.8
        million, or $12.5 million net of taxes, which was reflected in our results
        of
        operations.  The impairment charge did not result in any future cash
        expenditures.  In addition, we concluded that the Lender Services
        segment’s goodwill balance was not impaired.
 
 In
        January 2006, we announced our plan
        to relocate and consolidate our corporate offices and shared resources
        operations.  As a result, we wrote down the existing corporate offices
        and related assets to fair value less cost to sell.  For the six
        months ended June 30, 2006, the impairment charge for the write down was
        approximately $9.7 million, or $6.3 million net of taxes, which was reflected
        in
        our consolidated results of operations.
 
 **11.           SEGMENT
        INFORMATION**
 
 We
        are engaged in the business of
        providing title insurance as well as a broad array of real estate
        transaction-related services through our subsidiaries.  We have three
        reporting segments that fall within three primary business segments: Title
        Operations, Lender Services, and Financial Services.  The remaining
        immaterial businesses have been combined into a category called Corporate
        and
        Other.
  20
  Title
        Operations includes residential
        and commercial title insurance business, escrow and closing services, commercial
        real estate services, and other real estate transaction management
        services.
 
 Lender
        Services provides services to
        national and regional mortgage lenders consisting primarily of mortgage
        origination (e.g. real estate transaction management services, consumer mortgage
        credit reporting, flood zone determinations, residential appraisal, and
        valuation services, etc.), loan servicing (e.g. real estate tax processing
        and
        default management), and loan subservicing.
 
 Financial
        Services consists of Orange
        County Bancorp and its wholly-owned subsidiary, Centennial Bank, a California
        industrial bank primarily engaged in the business of providing real estate
        loans
        in the Southern California market and, to a lesser degree, in Arizona and
        Nevada.
 
 Corporate
        and Other includes home
        warranty, residential property inspection, commercial property valuations
        and
        assessment businesses, and due diligence services as well as the unallocated
        portion of the corporate expenses related to our corporate offices and
        unallocated interest expense.
 
 We
        provide real estate transaction
        services through direct operations and agents throughout the United States
        and
        in Mexico, Canada, the Caribbean, Latin America, Europe, and
        Asia.  International operations account for less than 1 percent of our
        operating revenue.
 
 The
        following tables provide selected
        financial information about our operations by segment for the three and six
        months ended June 30, 2007 and 2006:
 
 Three
                    Months Ended June 30,Operating
                  Revenue
                
                
                Personnel
                  Cost
                
                
                Depreciation
                
                
                Amortization
                    of Intangible
                  Assets
                
                
                Impairment
                  of
                    Intangible
                  and
                    Long-
                  Lived
                    Assets
                
                
                Income
                  Before
                  Taxes(In
                    millions)2007Title
                    Operations
                
                $
                863.3
                
                
                $
                262.0
                
                
                $
                7.0
                
                
                $
                3.4
                
                
                $
                -
                
                
                $
                30.4Lender
                    Services
                
                
                68.9
                
                
                
                26.3
                
                
                
                2.8
                
                
                
                1.2
                
                
                
                -
                
                
                
                1.7Financial
                    Services
                
                
                0.2
                
                
                
                0.8
                
                
                
                -
                
                
                
                0.1
                
                
                
                -
                
                
                
                5.0Corporate
                    and Other
                
                
                39.1
                
                
                
                26.9
                
                
                
                3.9
                
                
                
                0.6
                
                
                
                -
                
                
                
                (25.4
                )Total
                
                $
                971.5
                
                
                $
                316.0
                
                
                $
                13.7
                
                
                $
                5.3
                
                
                $
                -
                
                
                $
                11.72006Title
                    Operations
                
                $
                882.0
                
                
                $
                240.6
                
                
                $
                5.6
                
                
                $
                3.1
                
                
                $
                -
                
                
                $
                72.8Lender
                    Services
                
                
                59.7
                
                
                
                23.5
                
                
                
                1.2
                
                
                
                2.6
                
                
                
                -
                
                
                
                6.5Financial
                    Services
                
                
                0.3
                
                
                
                0.6
                
                
                
                -
                
                
                
                0.1
                
                
                
                -
                
                
                
                4.4Corporate
                    and Other
                
                
                29.1
                
                
                
                24.1
                
                
                
                0.5
                
                
                
                0.5
                
                
                
                -
                
                
                
                (26.3
                )Total
                
                $
                971.1
                
                
                $
                288.8
                
                
                $
                7.3
                
                
                $
                6.3
                
                
                $
                -
                
                
                $
                57.4
 
  21
   Six
                    Months Ended June 30,Operating
                  Revenue
                
                
                Personnel
                  Cost
                
                
                Depreciation
                
                
                Amortization
                  of
                    Intangible
                  Assets
                
                
                Impairment
                  of
                    Intangible
                  and
                    Long-
                  Lived
                    Assets
                
                
                Income
                  Before
                  Taxes(In
                    millions)2007Title
                    Operations
                
                $
                1,654.7
                
                
                $
                516.8
                
                
                $
                14.2
                
                
                $
                5.4
                
                
                $
                -
                
                
                $
                64.5Lender
                    Services
                
                
                151.8
                
                
                
                54.3
                
                
                
                4.3
                
                
                
                3.3
                
                
                
                20.8
                
                
                
                (7.0
                )Financial
                    Services
                
                
                0.4
                
                
                
                1.7
                
                
                
                -
                
                
                
                0.1
                
                
                
                -
                
                
                
                10.1Corporate
                    and Other
                
                
                75.9
                
                
                
                51.0
                
                
                
                6.0
                
                
                
                2.5
                
                
                
                -
                
                
                
                (48.6
                )Total
                
                $
                1,882.8
                
                
                $
                623.8
                
                
                $
                24.5
                
                
                $
                11.3
                
                
                $
                20.8
                
                
                $
                19.02006Title
                    Operations
                
                $
                1,701.0
                
                
                $
                468.8
                
                
                $
                11.2
                
                
                $
                5.5
                
                
                $
                -
                
                
                $
                123.4Lender
                    Services
                
                
                117.5
                
                
                
                48.1
                
                
                
                2.3
                
                
                
                5.2
                
                
                
                -
                
                
                
                8.8Financial
                    Services
                
                
                0.5
                
                
                
                1.2
                
                
                
                -
                
                
                
                0.1
                
                
                
                -
                
                
                
                8.4Corporate
                    and Other
                
                
                54.4
                
                
                
                47.4
                
                
                
                1.6
                
                
                
                1.8
                
                
                
                9.7
                
                
                
                (64.7
                )Total
                
                $
                1,873.4
                
                
                $
                565.5
                
                
                $
                15.1
                
                
                $
                12.6
                
                
                $
                9.7
                
                
                $
                75.9
 
 
 **ITEM
                  2.**
              **MANAGEMENT'S
                  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                  OPERATIONS**
 
 The
        following discussion and analysis
        of financial condition and results of operations updates and should be read
        in
        conjunction with our Annual Report on Form 10-K for the year ended December
        31,
        2006 as filed with the Securities and Exchange Commission on February 28,
        2007.  A description of our business segments and certain key factors
        that affect these businesses are provided in Note 11 to Consolidated Financial
        Statements included herein and in our Annual Report on Form 10-K for the
        year
        ended December 31, 2006.  For information on risks and uncertainties
        related to our business that may make past performances not indicative of
        future
        results, or cause actual results to differ materially from any forward-looking
        statements made by us, see “Forward-Looking and Cautionary
        Statements.”
 
 **Overview**
 
 ***Revision
        of Prior Year
        Numbers***
 
 In
        2007, we refined our definition and
        measurement of commercial revenue and have revised our 2006 commercial revenue
        to be comparable to the 2007 presentation.
 
 ***Operations***
 
 As
        estimated by the Mortgage Bankers
        Association (“MBA”), total residential mortgage originations declined
        approximately $20 billion, or 2.7 percent, in second quarter 2007 from the
        comparable period in 2006 due to a softened buy/sell market that was offset
        in
        part by a stronger
  22
  refinance
        market.  Residential mortgage originations as estimated by the MBA
        improved 0.7 percent during the first half of 2007 when compared with the
        first
        half of 2006 because the effect of a stronger refinance market during the
        first
        six months of the year outweighed the effects of the softened buy/sell market,
        which was a primary cause of the second quarter 2007 decline.
 
 Operating
        revenues were $971.5 million and $971.1 million for the three months ended
        June
        30, 2007 and 2006, respectively, and $1,882.8 million and $1,873.4 million
        for
        the six months ended June 30, 2007 and 2006, respectively.
 
 Before
        the effect of mergers and acquisitions, our overall decrease in residential
        mortgage originations in second quarter 2007 resulted in the decline in
        operating revenues from agency and direct title operations in the Title
        Operations segment as well as declines in the home warranty and property
        inspection businesses when compared with second quarter 2006.  These
        declines were offset in part by growth in title and non-title commercial
        operations and growth in the default management services
        business.  The first half of 2007 showed trends similar to second
        quarter of 2007 and was also positively affected by the acceleration of deferred
        revenue in the loan servicing business in first quarter 2007.
 
 Our
        provision for claims as a percentage of operating revenue has trended upward
        recently, primarily due to claims frequency and severity for recent policy
        years.  We have noted a similar upward trend in provisions for claims
        occurring throughout the title insurance industry.  Since we are
        subject to liability for claims for an extended period of time, slight increases
        in claims frequency and severity for more recent policy years can result
        in a
        significant increase in the amount of liability required for potential
        claims.
 
 In
        first quarter 2007, we recorded a
        customer relationship intangible impairment charge of $20.8 million, or $12.5
        million net of taxes, as a result of the probable loss of business from Fremont
        General Corporation (“Fremont”), one of our tax and flood processing
        customers.  Fremont received a cease and desist order from the Federal
        Deposit Insurance Corporation related to lending practices in its mortgage
        origination business.  The impairment charge did not result in any
        future cash expenditures.  We also conducted an impairment test of the
        Lender Services segment’s goodwill balance as the probable loss of business was
        deemed to be an indication of potential impairment.  We concluded that
        the Lender Services segment goodwill balance was not impaired.  We
        have continued to service the Fremont loan portfolio that existed at the
        time
        the cease and desist order was issued.  For further details, see Note
        10, “Impairment of Intangible and Other Long-lived Assets” of the Notes to
        Consolidated Financial Statements in Part I, Item 1 of this report.
 
 We
        completed the merger with Capital
        Title Group, Inc. (“Capital Title”) on September 8, 2006.  Capital
        Title has been integrated into the Title Operations and Lender Services segments
        as of the merger date.  As of June 30, 2007, we have achieved
        annualized pretax cost savings of approximately $11 million.  We
        expect that by the end of 2007, synergies will produce annualized pretax
        cost
        savings of approximately $16 million.  For further details, see Note
        3, “Mergers and Acquisitions” of the Notes to Consolidated Financial Statements
        in Part I, Item 1 of this report.
  23
  As
        part of becoming a unified operating
        company, we are engaged in a number of initiatives to maximize our efficiency
        and improve return on equity.  These initiatives include a
        company-wide technology initiative to reduce the complexity and costs of
        over
        300 operating systems to a substantially reduced number of applications when
        completely phased in during 2009.  Once implemented in 2009, we expect
        that the technology initiatives will generate annual cost savings of
        approximately $35 million.  These cost savings are dependent upon the
        selection and implementation of a unified production system and our ability
        to
        manage and execute these projects successfully within the time frame
        indicated.
 
 ***Critical
        Accounting
        Estimates***
 
 The
        preparation of our financial
        statements requires management to make estimates and judgments that affect
        the
        reported amounts of certain assets, liabilities, revenue, expenses and related
        disclosures surrounding contingencies and commitments.  A summary of
        our significant critical accounting estimates can be found in Management’s
        Discussion and Analysis in our Annual Report on Form 10-K for the year ended
        December 31, 2006 as filed with the Securities and Exchange
        Commission.  Actual results could differ from these
        estimates.
 
 ***Recent
        Accounting Pronouncements***
 
 In
        March 2007, the Financial Accounting
        Standards Board (“FASB”) ratified Emerging Issues Task Force (“EITF”) Issue No.
        06-10, *Accounting for Collateral Assignment Split-Dollar Life Insurance
        Arrangements* (“EITF No. 06-10”).  EITF No. 06-10 requires an
        employer to recognize a liability for the postretirement benefit related
        to a
        collateral assignment split-dollar life insurance arrangement in accordance
        with
        either Statement of Financial Accounting Standards (“SFAS”) No. 106 or
        Accounting Principles Board (“APB”) Opinion No. 12 if the employer has agreed to
        maintain a life insurance policy during the employee’s retirement or provide the
        employee with a death benefit.  EITF No. 06-10 also requires an
        employer to recognize and measure an asset based on the nature and substance
        of
        the collateral assignment split-dollar life insurance
        arrangement.  EITF No. 06-10 is effective for fiscal years beginning
        after December 15, 2007 with early adoption permitted.  We have
        determined that the adoption of EITF No. 06-10 will not have a material effect
        on our financial statements.
 
 In
        February 2007, FASB issued SFAS No. 159, *The Fair Value Option for Financial
        Assets and Financial Liabilities**-**Including
        an amendment of FASB Statement No. 115*(“SFAS No. 159”).  SFAS
        No. 159 provides companies with an option to report selected financial assets
        and liabilities at fair value.  Unrealized gains and losses on items
        for which the fair value option has been elected are reported in
        earnings.  SFAS No. 159 is effective as of the beginning of an
        entity’s first fiscal year that begins after November 15, 2007 with early
        adoption permitted.  We are evaluating the effect that the adoption of
        SFAS No. 159 will have on our financial statements.
 
 In
        September 2006, FASB issued SFAS No.
        158, *Employers’ Accounting for Defined Benefit Pension and Other
        Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106 and
        132(R)* (“SFAS No. 158”).  This standard requires employers to
        recognize the underfunded or overfunded status of a defined benefit
        postretirement plan as an asset or liability
  24
  in
        its
        statement of financial position and to recognize changes in the funded status
        in
        the year in which the changes occur through accumulated other comprehensive
        income.  Additionally, SFAS No. 158 requires employers to measure the
        funded status of a plan as of the date of its year-end statement of financial
        position.  The new reporting requirement and related new footnote
        disclosure rules of SFAS No. 158 are effective for fiscal years ending after
        December 15, 2006 and have been adopted.  See Note 7, “Pensions and
        Other Post-Retirement Benefits” of the Notes to Consolidated Financial
        Statements in Part I, Item 1 of this report.  The new measurement date
        requirement applies for fiscal years ending after December 15, 2008 and has
        not
        yet been adopted.
 
 In
        September 2006, FASB issued SFAS No.
        157, *Fair Value Measurements*(“SFAS No. 157”).  SFAS No. 157
        defines fair value, establishes a framework for measuring fair value in
        generally accepted accounting principles and expands disclosures about fair
        value measurements. SFAS No. 157 is effective for financial statements issued
        for fiscal years beginning after November 15, 2007 with earlier application
        encouraged.  We are evaluating the effect that the adoption of SFAS
        No. 157 will have on our financial statements.
 
 ***Seasonality***
 
 The
        residential title insurance
        business tends to be seasonal.  Residential buy/sell activity is
        generally slower in the winter, when fewer families buy or sell homes, with
        increased volumes in the spring and summer.  Residential refinancing
        activity is generally more uniform throughout the seasons, but is subject
        to
        interest rate variability.  We typically report our lowest revenue
        from agency and direct title operations in the first quarter, with such revenue
        increasing into the second quarter.  Due to the continued downturn in
        the residential real estate environment, we did not experience the traditional
        seasonal pickup in volume during second quarter 2007 as we have in the past
        several years, causing our revenue to remain flat during second quarter 2007
        over the first quarter of this year.
 
 **Results
        of Operations**
 
 ***Operating
        Revenue***
 
 The
        following table
        provides**a summary of our operating revenue for the three and six
        months ended June 30, 2007 and 2006:
  25
  
 Three
                  Months Ended June 30,2007
              
              
              2006(Dollars
                  in millions)Title
                  OperationsDirect
                  Operations
              
              $
              410.1
              
              
              
              42.2
              %
              
              $
              376.7
              
              
              
              38.8
              %Agency
                  Operations
              
              
              453.2
              
              
              
              46.7
              
              
              
              505.3
              
              
              
              52.0863.3
              
              
              
              88.9
              
              
              
              882.0
              
              
              
              90.8Lender
                  Services
              
              
              68.9
              
              
              
              7.1
              
              
              
              59.7
              
              
              
              6.2Financial
                  Services
              
              
              0.2
              
              
              
              -
              
              
              
              0.3
              
              
              
              -Corporate
                  and Other
              
              
              39.1
              
              
              
              4.0
              
              
              
              29.1
              
              
              
              3.0Total
              
              $
              971.5
              
              
              
              100.0
              %
              
              $
              971.1
              
              
              
              100.0
              %
 
 
 Six
                  Months Ended June 30,2007
              
              
              2006(Dollars
                  in millions)Title
                  OperationsDirect
                  Operations
              
              $
              779.4
              
              
              
              41.4
              %
              
              $
              717.5
              
              
              
              38.3
              %Agency
                  Operations
              
              
              875.3
              
              
              
              46.5
              
              
              
              983.5
              
              
              
              52.51,654.7
              
              
              
              87.9
              
              
              
              1,701.0
              
              
              
              90.8Lender
                  Services
              
              
              151.8
              
              
              
              8.1
              
              
              
              117.5
              
              
              
              6.3Financial
                  Services
              
              
              0.4
              
              
              
              -
              
              
              
              0.5
              
              
              
              -Corporate
                  and Other
              
              
              75.9
              
              
              
              4.0
              
              
              
              54.4
              
              
              
              2.9Total
              
              $
              1,882.8
              
              
              
              100.0
              %
              
              $
              1,873.4
              
              
              
              100.0
              %
 
 
 *Title
        Operations**-***Operating
        revenue from direct title operations increased by $33.4 million, or 8.9 percent,
        in second quarter 2007 from second quarter 2006 and increased by $61.9
        million, or 8.6 percent, in the first half of 2007 over the comparable period
        in
        2006. During second quarter and the first half of 2007, direct
        operating revenue was positively affected by increased volume as a result
        of the
        merger with Capital Title and strong commercial revenues. These increases
        were partially offset by overall weakness in the residential real estate
        market.
 
 Revenue
        from direct title commercial operations was $127.5 million in second
        quarter 2007, compared to $92.3 million in second quarter 2006,
        an increase of 38.1 percent, and $219.7 million in the first half of 2007,
        compared to $178.0 million in the first half of 2006, an increase of 23.4
        percent.
  26
  Closed
        orders from our direct title
        operations were approximately 176,500 in second quarter 2007 and
        approximately 180,700 in second quarter 2006, while direct revenue per direct
        order closed increased approximately 9.5 percent, from approximately $2,100
        in
        second quarter 2006 to approximately $2,300 in second quarter
        2007.  Closed orders from direct title operations for the first half
        of 2007 were approximately 346,000 compared to approximately 350,000 for
        the first half of 2006, while direct revenue per direct order closed
        increased approximately 10.0 percent, from approximately $2,000 in the first
        half of2006
        to
        approximately $2,200 in the first half of2007.
 
 Operating
        revenue from agency title operations in second quarter 2007 decreased
        by $52.1 million, or 10.3 percent, from second quarter 2006, and
        operating revenue from agency title operations for the first half of 2007
        decreased by $108.2 million, or 11.0 percent, compared to the first half
        of 2006
        due to softer market conditions across most regions, particularly in certain
        southeastern markets.
 
 The
        MBA
        has forecasted that 2007 and 2008 residential mortgage originations will
        be
        lower than 2006 levels by approximately 9 percent and 19 percent,
        respectively.  We can provide no assurance that the effect of our
        acquisitions, commercial revenues and direct operating revenue per direct
        order
        closed will offset the forecasted decline in the residential real estate
        market.
 
 *Lender
        Services**-*****Operating
        revenue for Lender Services increased by $9.2 million, or 15.4 percent, in
        second quarter 2007 compared to second quarter 2006.  Operating
        revenue increased by $34.3 million, or 29.2 percent, for Lenders Services
        for
        the first half of 2007 compared to the first half of 2006.  Revenue
        for second quarter 2007 and for the first half of 2007 was positively
        affected by increased business as a result of the merger with Capital Title
        and
        growth in default management services.  Revenue in the first half of
        2007 was also positively affected by the acceleration of deferred revenue
        in the
        loan servicing business in first quarter 2007.  These increases were
        offset in part by lower volumes in certain product lines in the mortgage
        origination business and the loan servicing business due to a softer real
        estate
        market.  The default management services business experienced growth
        in volume in second quarter 2007 and in the first half of 2007 due to increased
        demand for lien monitoring, broker price opinions and appraisals, foreclosures,
        reconveyances and other related services during the downturn in the residential
        real estate cycle.
 
 *Corporate
        and Other**-*** Operating
        revenue for Corporate and Other increased by $10.0 million, or 34.4 percent,
        in
        second quarter 2007 over second quarter 2006 and increased by $21.5
        million, or 39.5 percent in the first half of 2007 over the first half of
        2006.  The increase in operating revenue was primarily due to
        continued strong commercial business that has benefited from a strong
        pipeline and a recent acquisition.  Revenue from commercial operations
        was $24.6 million in second quarter 2007 compared to $14.5 million in second
        quarter 2006.  Revenue from commercial operations was $44.0 million in
        the first half of 2007 compared to $26.8 million in the first half of
        2006.  Improvements in commercial operations in second quarter 2007
        and in the first half of 2007 were offset in part by declines in the home
        warranty and property inspections businesses.
  27
  ***Investment
        and Other
        Income***
 
 Investment
        and other income decreased
        by approximately 1 percent in second quarter 2007 over second quarter 2006
        and
        increased by approximately 1 percent in the first half of 2007 over the second
        half of 2006.  Investment and other income includes income generated
        for our investment and loan portfolio and our equity in income generated
        by our
        unconsolidated affiliates.  Income from our unconsolidated affiliates
        has declined in the second quarter and first half of 2007 when compared with
        the
        second quarter and first half of 2006, respectively, following the overall
        decline in the residential real estate market, and has offset increases in
        investment income from a higher loan portfolio and a modest increase in interest
        rates.
 
 ***Net
        Realized Investment Gains
        (Losses)***
 
 Net
        realized investment gains (losses)
        were $1.4 million in second quarter 2007 compared to $(1.5) million in second
        quarter 2006 and $8.4 million in the first half of 2007 compared to $(0.6)
        million in the first half of 2006.  The increase was primarily due to
        gains from the repositioning of our REIT portfolio and the reclassification
        of
        unrealized net gains on trading investments from accumulated other comprehensive
        income (loss).  In addition, we recognized approximately $1.6 million
        of realized losses in second quarter 2006 on fixed income securities that
        were
        deemed to be other-than-temporarily impaired.  For further details,
        see Note 4, “Investments” of the Notes to Consolidated Financial Statements in
        Part I, Item 1 of this report.
 
 ***Salary
        and Employee
        Benefits***
 
 The
        following table provides a summary
        of our salary and employee benefit costs for the three and six months ended
        June
        30, 2007 and 2006:
 
 Three
                  Months Ended June 30,2007
              
              
              2006(Dollars
                  in millions)Title
                  Operations
              
              $
              262.0
              
              
              
              82.9
              %
              
              $
              240.6
              
              
              
              83.3
              %Lender
                  Services
              
              
              26.3
              
              
              
              8.3
              
              
              
              23.5
              
              
              
              8.1Financial
                  Services
              
              
              0.8
              
              
              
              0.3
              
              
              
              0.6
              
              
              
              0.2Corporate
                  and Other
              
              
              26.9
              
              
              
              8.5
              
              
              
              24.1
              
              
              
              8.4Total
              
              $
              316.0
              
              
              
              100.0
              %
              
              $
              288.8
              
              
              
              100.0
              %
 
  28
  
 Six
                  Months Ended June 30,2007
              
              
              2006(Dollars
                  in millions)Title
                  Operations
              
              $
              516.8
              
              
              
              82.8
              %
              
              $
              468.8
              
              
              
              82.9
              %Lender
                  Services
              
              
              54.3
              
              
              
              8.7
              
              
              
              48.1
              
              
              
              8.5Financial
                  Services
              
              
              1.7
              
              
              
              0.3
              
              
              
              1.2
              
              
              
              0.2Corporate
                  and Other
              
              
              51.0
              
              
              
              8.2
              
              
              
              47.4
              
              
              
              8.4Total
              
              $
              623.8
              
              
              
              100.0
              %
              
              $
              565.5
              
              
              
              100.0
              %
 
 
 *Title
        Operations –*Title
        Operations salary and employee benefit costs increased by $21.4 million,
        or 8.9
        percent, in second quarter 2007 compared to second quarter 2006, and increased
        by $48.0 million, or 10.2 percent in the first half of 2007 over the first
        half
        of 2006.  Average Full Time Equivalent (“FTE”) counts for the Title
        Operations segment were approximately 11,300 in second quarter 2007 versus
        approximately 10,500 in second quarter 2006, or an increase of 7.6
        percent.  FTE counts for the Title Operations segment increased to
        approximately 11,400 in the first half of 2007 from approximately 10,600
        in the
        first half of 2006, or an increase of 7.5 percent.   Salary and
        employee benefit costs and FTE counts increased primarily to service additional
        business from the merger with Capital Title (approximately 1,400 FTE counts
        and
        1,500 FTE counts in the second quarter and first half of 2007, respectively)
        and
        the increase in commercial business.  These increases were offset in
        part by declines in staffing levels in the agency and direct title operations
        in
        response to declines in the residential real estate market.
 
 *Lender
        Services*– Lender
        Services salary and employee benefit costs increased by $2.8 million, or
        11.9
        percent, in second quarter 2007 compared to second quarter 2006, and increased
        by $6.2 million, or 12.9 percent, in the first half of 2007 compared to the
        first half of 2006.  FTE counts for the Lender Services segment were
        approximately 1,800 in second quarter 2007 and in the first half of 2007
        versus
        approximately 1,500 in second quarter 2006 and in the first half of 2006,
        or an
        increase of 20.0 percent.   Salary and employee benefit costs and
        FTE counts increased primarily to service increased business as the result
        of
        the merger with Capital Title and other acquisitions.  These increases
        were offset in part by reductions in FTE counts in certain product lines
        in the
        loan servicing business and in the mortgage origination business to adjust
        to
        lower business volume.
 
 *Corporate
        and Other*–
Corporate and Other salary and employee benefit costs increased by $2.8
        million,
        or 11.6 percent, in second quarter 2007 over second quarter 2006 and by $3.6
        million, or 7.6 percent, in the first half of 2007 over the first half of
        2006.  Salary and employee benefit costs increased primarily to
        support strong commercial business included in the
  29
  Corporate
        and Other category.  These increases were offset in part by reductions
        in FTE counts in the property inspections business to adjust to lower business
        volumes.
 
 ***Provision
        for Policy and Contract
        Claims***
 
 Based
        on our quarterly review of the
        underlying claims data and trends therein, we have provided for claims losses
        using approximately 9.3 percent and 5.3 percent of operating revenue from
        the
        Title Operations segment for the second quarters of 2007 and 2006, respectively,
        and approximately 7.9 percent and 5.4 percent of operating revenue from the
        Title Operations segment for the first half of 2007 and 2006,
        respectively.  The increase in the claims provision ratio was
        primarily due to an increase in the frequency and severity of claims reported
        for policy years 2004 through 2006 which resulted in upward development for
        those policy years.  The claims provision increased by $33.6 million,
        or $21.8 million after taxes, in second quarter 2007 compared to second quarter
        2006.  Since we are subject to liability on claims for an extended
        period of time, slight changes in current claims experience can have a
        significant effect on the amount of liability required for potential Incurred
        But Not Reported (“IBNR”) claims.  We believe that we have reserved
        appropriately for all reported and IBNR claims at June 30, 2007 based on
        the
        results of the actuarial evaluation and evaluation of any known
        trend.  For further details, see Note 6, “Policy and Contract Claims”
of the Notes to Consolidated Financial Statements in Part I, Item 1 of this
        report.
 
 ***Impairment
                  of Intangible and Other Long-Lived
                  Assets***
 
 In
        first quarter 2007, we recorded an
        impairment of $20.8 million related to our customer relationship intangible
        asset of our tax and flood business in the Lender Services
        segment.  The effect
        of
        the impairment is expected to reduce amortization expense by approximately
        $3.2
        million on an annual basis.  In first quarter 2006, we wrote down our
        existing building and related assets to fair value less cost to sell by
        approximately $9.7 million in connection with the relocation and
        consolidation of our corporate offices and shared resources
        operations. No impairments were recorded in second quarter 2007 or in
        second quarter 2006.  For further details, see Note 10, “Impairment of
        Intangible and Other Long-Lived Assets” of the Notes to Consolidated Financial
        Statements in Part I, Item 1 of this report.
 
 ***Amortization***
 
 Amortization
        expense decreased by $1.0
        million in second quarter 2007 compared to second quarter 2006 and decreased
        by
        $1.3 million in the first half of 2007 compared to the first half of
        2006.  These declines were primarily due to the impairment of a
        customer relationship intangible asset in the tax and flood business of our
        Lender Services segment.  For further details, see Note 10,
“Impairment of Intangible and Other Long-lived Assets” of the Notes to
        Consolidated Financial Statements in Part I, Item 1 of this report.
 
  30
  ***Interest
        Expense***
 
 Interest
        expense is comprised of
        interest paid on long-term debt primarily in the Corporate and Other category,
        and interest paid to holders of demand deposits in the Financial Services
        segment.  Interest expense increased by $1.9 million in second quarter
        2007 compared to second quarter 2006 primarily due to interest on our senior
        notes that were used to pay a portion of the purchase price for Capital
        Title.  Interest expense increased by $5.0 million in the first half
        of 2007 compared to the first half of 2006 primarily due to interest on our
        senior notes and credit facility that were used to pay a portion of the purchase
        price for Capital Title.  See “Liquidity and Capital Resources” for
        further details.
 
 ***General,
        Administrative, and
        Other***
 
 The
        following table provides a summary
        of our general, administrative, and other costs for the three and six months
        ended June 30, 2007 and 2006:
 
 Three
                  Months Ended June 30,2007
              
              
              2006(Dollars
                  in millions)Title
                  Operations
              
              $
              130.7
              
              
              
              65.4
              %
              
              $
              121.2
              
              
              
              69.9
              %Lender
                  Services
              
              
              38.1
              
              
              
              19.1
              
              
              
              26.8
              
              
              
              15.5Financial
                  Services
              
              
              0.2
              
              
              
              0.1
              
              
              
              0.4
              
              
              
              0.2Corporate
                  and Other
              
              
              30.9
              
              
              
              15.4
              
              
              
              24.9
              
              
              
              14.4Total
              
              $
              199.9
              
              
              
              100.0
              %
              
              $
              173.3
              
              
              
              100.0
              %
 
 
 Six
                  Months Ended June 30,2007
              
              
              2006(Dollars
                  in millions)Title
                  Operations
              
              $
              252.7
              
              
              
              65.3
              %
              
              $
              237.0
              
              
              
              69.4
              %Lender
                  Services
              
              
              76.8
              
              
              
              19.8
              
              
              
              54.7
              
              
              
              16.0Financial
                  Services
              
              
              0.5
              
              
              
              0.1
              
              
              
              0.6
              
              
              
              0.2Corporate
                  and Other
              
              
              57.4
              
              
              
              14.8
              
              
              
              49.2
              
              
              
              14.4Total
              
              $
              387.4
              
              
              
              100.0
              %
              
              $
              341.5
              
              
              
              100.0
              %
 
 
  31
  *Title
        Operations –*Title
        Operations general and administrative expenses increased by $9.5 million,
        or 7.8
        percent, in second quarter 2007 from second quarter 2006 and increased by
        $15.7
        million, or 6.6 percent, in the first half of 2007 from the first half of
        2006.  General and administrative expenses increased primarily to
        support increased market share as a result of the merger with Capital Title
        and increased commercial business and was partially offset by cost reductions
        to
        match declines in residential business volume.
 
 *Lender
        Services –*Lender
        Services general and administrative expenses increased by $11.3 million,
        or 42.2
        percent, in second quarter 2007 from second quarter 2006 and increased by
        $22.1
        million, or 40.4 percent, in the first half of 2007 from the comparable period
        in 2006.  The increase in general and administrative expenses was
        primarily due to the merger with Capital Title and other acquisitions and
        to
        support growth in the default management services line within the loan servicing
        business.  These increases were offset in part by declines in certain
        lines of the loan servicing and mortgage originations businesses to match
        declines in business volume.
 
 *Corporate
        and Other*– Corporate
        and Other general and administrative expenses increased by $6.0 million,
        or 24.1
        percent, in second quarter 2007 from second quarter 2006 and increased by
        $8.2
        million, or 16.7 percent, in the first half of 2007 from the first half
        2006.  The increase in general and administrative expenses was
        primarily to support increased commercial business.
 
 ***Income
        Taxes***
 
 Our
        effective income tax rate, which
        includes a provision for state income and franchise taxes for non-insurance
        subsidiaries, was 33.5 percent for the first half of 2007 and 35.0 percent
        for
        the first half of 2006.  The difference in the effective tax rate was
        due to favorable permanent differences and the mix of state taxes related
        to our
        non-insurance subsidiaries.
 
 ***Net
        Income***
 
 Our
        reported net income was $7.9
        million or $0.42 per common share on a diluted basis for second quarter 2007
        compared to net income of $35.6 million or $2.06 per common share on a diluted
        basis for second quarter 2006.  Net income for second quarter 2007
        reflected the weakness in the residential housing market and the increase
        in the
        claims provision of $34.3 million, or $22.3 million after
        taxes.  These decreases were offset in part by continued strength in
        the commercial market.  Our reported net income was $12.6 million or
        $0.68 per common share on a diluted basis for the first half of 2007 compared
        to
        net income of $49.3 million or $2.82 per common share on a diluted basis
        for the
        first half of 2006.  Net income for the first half of 2007 reflected
        an impairment charge in first quarter 2007 for a customer relationship
        intangible asset in the Lender Services segment of $20.8 million, or $12.5
        million net of taxes, and a higher claims provision ratio.  Net income
        for the first half of 2006 included the write down of the corporate offices
        in
        first quarter 2006 to fair value less cost to sell of $9.7 million, or $6.3
        million net of taxes.  Due to an increase in our stock price, the
        effect of convertible debt on dilutive common shares increased from 0.5 million
        shares for the three months ended June 30, 2006 to 2.1 million shares for
        the
        three months ended June 30, 2007 and increased from 0.5 million
  32
  shares
        for the six months ended June 30, 2006 to 1.5 million shares for the six
        months
        ended June 30, 2007.  For further details, see Note 6, “Policy and
        Contract Claims,” Note 10, “Impairment of Intangible and Other Long-Lived
        Assets,” and Note 9, “Shareholders’ Equity” of the Notes to Consolidated
        Financial Statements in Part I, Item 1 of this report.
 
 **Liquidity
        and Capital Resources**
 
 ***Consolidated***
 
 Cash
        provided by operating activities
        was $112.7 million for the first half of 2007 compared to $29.4 million for
        the
        first half of 2006.  The increase in cash provided by operating
        activities was due to the timing of income tax payments.  Cash
        provided by investing activities was $182.4 million for the first half of
        2007
        compared to cash used in investing activities of $(35.8) million for the
        first
        half of 2006.  The increase in cash provided by investing activities
        was due primarily to proceeds from the sale of short-term investments, proceeds
        from the sale or maturity of fixed-maturity and equity securities, and declines
        in investments in federal funds sold.  This increase was offset in
        part by the cost of additions to the investment portfolio and increases in
        loans
        receivable.  Cash used in financing activities was $(291.2) million
        for the first half of 2007 compared to $(1.8) million for the first half
        of
        2006.  The increase in cash used in financing activities was due
        primarily to the repayment of debt, common stock repurchases, and the decline
        in
        escrow deposits held by Centennial Bank which trended with the general decline
        in the real estate market.  At June 30, 2007, we held cash of $86.4
        million and investments of $1,583.6 million.
 
 ***Parent
        Company***
 
 For
        the six months ended June 30, 2007,
        our primary uses of funds at the holding company level included pay down
        of the
        credit arrangement that was used to fund, in part, the merger with Capital
        Title, share repurchases, funding the working capital needs of our subsidiaries,
        and payment of dividends on our common stock.  At June 30, 2007, there
        was approximately $105.0 million of cash, short-term investments and marketable
        securities at the holding company level available for general corporate
        purposes, payment of dividends, and share repurchases.  The holding
        company’s principal source of funds is dividends from its title insurance
        subsidiaries.
 
 ***Regulatory***
 
 In
        June 2006, we completed the process
        of redomesticating our three principal title insurance subsidiaries,
        Commonwealth Land Title Insurance Company, Lawyers Title Insurance Corporation
        and Transnation Title Insurance Company from the States of Pennsylvania,
        Virginia and Arizona, respectively, to the State of Nebraska.  The
        redomestication of these title insurance subsidiaries is expected to result
        in
        streamlined regulatory, tax and statutory accounting functions derived from
        having these subsidiaries subject to the same laws and
        regulations.  Under Nebraska insurance laws and regulations,
        approximately $152.0 million of the net assets of our consolidated insurance
        subsidiaries are available during the remainder of 2007 for
        ordinary
  33
  dividends,
        loans or advances to us.  The redomestication of these subsidiaries is
        expected to increase the net income and the cumulative amount of surplus
        that is
        available to pay dividends to the holding company by the aggregate amount
        that
        these subsidiaries’ total statutory reserves exceed GAAP claims reserves,
        subject to certain annual limitations and any approval that may be required
        by
        the Nebraska Department of Insurance.  We received approximately $15
        million and $85 million in dividends from our three principal title insurance
        subsidiaries during the second quarter and the first half of 2007,
        respectively.
 
 ***Investment
        Strategy***
 
 During
        first quarter 2007, we
        transferred $142.6 million of our fixed-maturity securities from
        available-for-sale securities to trading securities.  We did not
        transfer any of our securities between investment categories during second
        quarter 2007.  For further details, see Note 4, “Investments” of the
        Notes to Consolidated Financial Statements in Part I, Item 1 of this
        report.
 
 ***Mergers
        and Acquisitions***
 
 On
        September 8, 2006, we completed the
        merger with Capital Title which consists of a title insurance underwriter,
        several title and escrow agency operations, a property appraisal company,
        a
        settlement services provider and other related companies.  Capital
        Title services customers primarily in Arizona, California and Nevada in addition
        to providing lender services on a national basis.  We believe that our
        merger with Capital Title has strengthened our presence in key western states
        and added scale to our Lender Services platform.  We acquired 100
        percent of Capital Title’s common stock for approximately $252.6 million, which
        consisted of $202.9 million of cash, including direct transaction costs of
        $3.6
        million, and $49.7 million of our common stock, which represented 775,576
        shares.  Capital Title has been integrated into the Title Operations
        and Lender Services segments as of the merger date.  As of June 30,
        2007, we have achieved annualized pretax cost savings of approximately $11
        million.  We expect that by the end of 2007, synergies will produce
        annualized pretax cost savings of approximately $16 million.  For
        further details, see Note 3, “Mergers and Acquisitions” of the Notes to
        Consolidated Financial Statements in Part I, Item 1 of this report.
 
 ***Shareholders’
        Equity***
 
 In
        October 2005, the Board of Directors
        approved a share repurchase program expiring in July 2007 (the “2005 Program”)
        that authorized us to repurchase 1.25 million shares of our common
        stock.  Under the 2005 Program, we repurchased 375,000 shares during
        the first six months of 2006 for $24.6 million, at an average cost of $65.49
        per
        share; we repurchased 243,000 shares during the second half of 2006 for $15.6
        million, at an average cost of $64.06 per share.  During the first
        three months of 2007, we repurchased 569,000 shares for $39.9 million, at
        an
        average cost of $70.18 per share.  As of March 31, 2007, there were no
        authorized shares remaining under the 2005 Program.
 
 In
        February 2007, the Board of
        Directors approved a share repurchase program expiring in October 2008 (the
        “2007 Program”) that authorized us to repurchase 1.5 million shares of
        our
  34
  common
        stock.  Under the 2007 Program, we repurchased 474,000 shares during
        second quarter 2007 for $42.0 million, at an average cost of $88.54 per
        share.  No shares were repurchased under this program in first quarter
        2007.  At June 30, 2007, there were approximately 1,026,000 shares
        remaining under the 2007 Program.
 
 Effective
        April 1, 2007, our 3.25 percent convertible senior debentures due 2034 (“2004
        debentures”) became convertible to common stock during second quarter 2007
        through and including June 30, 2007.  These debentures are also
        convertible during third quarter 2007 through and including September 30,
        2007.  For further details, see Note 9, “Shareholders’ Equity” of the
        Notes to Consolidated Financial Statements in Part I, Item 1 of this
        report.
 
 Effective
        July 1, 2007, our 3.125
        percent convertible senior debentures due 2033 became convertible to common
        stock during third quarter 2007 through and including September 30,
        2007.  These debentures are also convertible during third quarter 2007
        through and including September 30, 2007.  For further details, see
        Note 9, “Shareholders’ Equity” of the Notes to Consolidated Financial Statements
        I Part I, Item 1 of this report.
 
 In
        connection with the issuance of the
        2004 debentures, we entered into a call option designed to mitigate the
        potential dilution from the conversion of the 2004 debentures.  Under
        the ten-year term of the call option, we may require a counterparty to deliver
        approximately 2.3 million shares of our common stock to us at a price which
        approximates the conversion price of the 2004 debentures.  For further
        details, see Note 2, “Earnings Per Share” of the Notes to Consolidated Financial
        Statements in Part I, Item 1 of this report.
 
 ***Summary***
 
 We
        believe our revolving credit
        facilities and anticipated cash flows from operations will provide us with
        sufficient liquidity to meet our operating requirements for the foreseeable
        future.  For further information about our borrowings, see our Annual
        Report on Form 10-K for the year ended December 31, 2006.
 
 **Pending
        Legal Proceedings**
 
 ***General***
 
 We
        are involved in certain litigation
        arising in the ordinary course of our businesses.  Although the
        ultimate outcome of these matters cannot be ascertained at this time and
        the
        results of legal proceedings cannot be predicted with certainty, we believe,
        based on current knowledge, that the resolution of these matters will not
        have a
        material adverse effect on our financial position or results of
        operations.
 
 ***Litigation
        Not in the Ordinary Course
        of Business***
 
 On
        June 22, 2004, Gateway Title
        Company, Inc. (“Gateway”), Commonwealth Land Title Company, Inc. and LandAmerica
        Financial Group, Inc. (collectively, “Gateway Plaintiffs”)
        filed
  35
  a
        Complaint, subsequently amended by a First Amended Complaint filed June 25,
        2004, in the Superior Court of California, County of Los Angeles, Central
        District (the “Court”), against the Mercury Company and its affiliates Financial
        Title, Alliance Title, Investors Title and various individuals including
        Joseph
        DiChiacchio, a former manager of LandAmerica (Case No. BC 317441) (collectively,
        “Gateway Defendants”).  The lawsuit claimed substantial monetary and
        punitive damages for unfair competitive business practices in conjunction
        with
        Gateway Plaintiffs’ loss of over 300 employees in California, most of which
        appears to have occurred within an approximately twenty-four month
        period.  On December 13, 2004, Alliance Title Company, Inc., Financial
        Title Company, Inc., Roberto Olivera and Ray Arias filed a Cross-Complaint
        for
        unfair competitive business practices.  On December 13, 2004, Mr.
        DiChiacchio also filed a Cross-Complaint alleging similar claims, including
        back
        wages and additional bonus payments, which Gateway Plaintiffs
        disputed.  After completion of discovery, a jury trial began in early
        May 2006 and resulted in a verdict for Gateway of approximately $8.3
        million.  Judgment was not entered pending resolution of the
        Cross-Complaints.
 
 On
        January 14, 2005, First California
        Title Company, New Century Title Company (“New Century”) and United Title
        Company (collectively, “Capital Title Plaintiffs”) filed a Complaint in the
        Superior Court of the State of California, County of Los Angeles, against
        Financial Title Company, Mercury Companies, Inc. (“Mercury”), Stacy Neves,
        Stephanie Howard, George Willard and Tony Becker (Case  No. BC 327332)
        (collectively, “Capital Title Defendants”).  The lawsuit claimed
        substantial monetary and punitive damages for unfair competitive business
        practices in conjunction with Capital Title Plaintiffs’ loss of approximately 80
        employees in California to Capital Title Defendants over an approximately
        eight
        month period.  The complaint was later amended to include Alliance
        Title Company and Christine De’Martini as named defendants.  On
        September 8, 2006, we completed a merger in which Capital Title Plaintiffs
        became affiliated companies.  A jury trial began on October 17,
        2006.  On December 28, 2006, the jury returned its verdict for Capital
        Title Plaintiffs in the approximate amount of $2 million.  The
        punitive damages phase of the bifurcated trial was held on January 2, 2007
        and
        resulted in a punitive damages award for Capital Title Plaintiffs in the
        approximate amount of $14.6 million.  Judgment was entered on March 8,
        2007. Capital Title Defendants filed several post-trial motions including
        motions for a new trial on the issue of punitive damages.  On March
        22, 2007, the trial court granted Mercury’s motion for new trial on the issue of
        punitive damages.  Having found that the punitive damages awarded by
        the jury in favor of plaintiff New Century violated due process, the trial
        court
        reduced the amount of the punitive damages awarded against Mercury from $11.6
        million to $2.9 million.  On April 18, 2007, the trial court issued a
        Minute Order modifying the previous judgment entered in favor of New Century
        to
        reflect this reduction of punitive damages.  The trial court denied
        similar motions for new trial brought by other Capital Title
        Defendants.  Accordingly, the total amount of punitive damages awarded
        against Capital Title Defendants, after the March 22, 2007 order, is $5.9
        million.
 
 Voluntary
        mediation beginning on April
        4, 2007 led the parties in both cases to a settlement in July 2007, providing
        for a payment in the amount of $12.5 million by Mercury to LandAmerica and
        the
        resolution of all claims, including but not limited to cross claims,
        post-trial
  36
  motions
        and appeals, thus eliminating the necessity for later scheduled trials,
        including the trial on the Cross Complaints, and appeal deadlines.
 
 On
        January 25, 2002, Miles R. Henderson
        and Patricia A. Henderson (“Plaintiffs in the Henderson Suit”) filed a putative
        class action suit (the “Henderson Suit”) against Lawyers Title Insurance
        Corporation (“Lawyers Title”) in the Court of Common Pleas for Cuyahoga County,
        Ohio.  Lawyers Title removed the case to the District Court for the
        Northern District of Ohio on March 6, 2002, and Plaintiffs in the Henderson
        Suit
        amended the complaint on March 8, 2002.  On June 28, 2002, the
        District Court remanded the case to the Court of Common Pleas for Cuyahoga
        County, Ohio.  A similar putative class action suit was filed against
        Commonwealth, by Rodney P. Simon and Tracy L. Simon (“Plaintiffs in the Simon
        Suit”) in the Court of Common Pleas for Cuyahoga County, Ohio on March 5, 2003.
        Plaintiffs in both suits alleged that the defendants had a practice of charging
        original rates for owners title insurance policies when lower, reissue rates
        should have been charged.  Both defendants initially responded by
        demanding that the actions be arbitrated, but on final appeal to the Ohio
        Supreme Court, the Court ruled that arbitration was not required for either
        suit.  On remand to the trial court, Plaintiffs in the Henderson Suit
        are now seeking to have the case certified as a class action on behalf of
        all
        sellers and buyers of residential property in Ohio who paid the higher original
        rate from 1992 to the present. The court has set a class certification hearing
        date of December 6-7, 2007.  Plaintiffs in the Simon Suit are seeking
        to have the case certified as a class action on behalf of all sellers of
        residential property in Ohio, who paid the original rate from 1993 to the
        present, as requested in the original complaint, although no hearing date
        on the
        class certification has been scheduled.  Plaintiffs in both cases have
        demanded an unspecified amount of compensatory damages, declaratory and
        injunctive relief, punitive damages, and attorneys’ fees and
        costs.  These cases are in the early stages, there have been no class
        certifications, and the defendants believe that they have meritorious
        defenses.  At this stage of the litigation, the amount or range of
        loss that could result from an unfavorable outcome cannot be reasonably
        estimated.
 
 On
        September 20, 2004, Kenneth and
        Deette Higgins (“Plaintiffs in the Higgins Suit”) filed a putative class action
        suit (the “Higgins Suit”) against Commonwealth Land Title Insurance Company
        (“Commonwealth”) in the Circuit Court of Nassau County, Florida.  On
        February 3, 2005, Plaintiffs in the Higgins Suit filed an Amended Class Action
        Complaint.  Plaintiffs in the Higgins Suit allege that Commonwealth
        had a practice of charging refinance borrowers higher basic rates for title
        insurance, rather than the lower reissue rates for which they are alleged
        to
        have qualified, and of failing to disclose the potential availability of
        the
        lower rates.  Plaintiffs in the Higgins Suit seek to have the case
        certified as a class action on behalf of all Florida persons or entities
        who
        refinanced their mortgages or fee interests on the identical premises from
        July
        1, 1999 to the present where there was no change in the fee ownership and
        who
        were charged a premium in excess of the reissue premium.  Plaintiffs
        in the Higgins Suit have demanded an unspecified amount of compensatory damages,
        declaratory relief, attorneys’ fees, costs and pre-judgment
        interest.  This case is in the early stages, there has been no class
        certification, and Commonwealth believes it has meritorious
        defenses.  At this stage of the litigation, the amount or range of
        loss that could result from an unfavorable outcome cannot be reasonably
        estimated.
  37
  On
        July 24, 2006, A. D. Alberton
        (“Plaintiff in the Alberton Suit”) filed a putative class action suit (the
“Alberton Suit”) against Commonwealth which is currently pending in the United
        States District Court for the Eastern District of Pennsylvania.  A
        similar putative class action suit was filed against Lawyers Title by Shariee
        L.
        De Cooman (“Plaintiff in the De Cooman Suit”) in the Court of Common Pleas of
        Allegheny County, Pennsylvania on or about August 12, 2005.  On
        November 1, 2005, Plaintiff in the De Cooman Suit filed an Amended
        Complaint.    Plaintiff in the Alberton Suit alleges that
        Commonwealth charged rates for title insurance in excess of statutorily mandated
        rates and/or failed to disclose to consumers that they were entitled to reduced
        title insurance premiums and seeks to certify a class on behalf of all consumers
        who paid premiums for the purchase of title insurance on Pennsylvania properties
        from Commonwealth at any time during the year 2000 until August 2005 and
        qualified for a discounted refinance or reissue rate discount and did not
        receive such discount.  Plaintiff in the De Cooman Suit alleges that
        Lawyers Title charged the basic rate rather than a reissue or discounted
        rate to
        certain consumers and seeks to certify a class on behalf of all owners of
        residential real estate in Pennsylvania who, at any time during the ten years
        prior to August 12, 2005 paid premiums for the purchase of title insurance
        from
        Lawyers Title, qualified for a reissue or other discounted rate, and did
        not
        receive such rate.  The court in the Alberton Suit has set a class
        certification hearing date of October 16, 2007.  The trial is
        currently scheduled to commence on January 14, 2008. The court in the De
        Cooman
        Suit has set a class certification hearing date of October 9,
        2007.  Plaintiff in the Alberton Suit has demanded an unspecified
        amount of compensatory damages, declaratory relief, triple damages, restitution,
        pre-judgment and post-judgment interest and expert fees, attorneys’ fees and
        costs.  Plaintiff in the De Cooman Suit has demanded an unspecified
        amount of compensatory damages, punitive damages, triple damages, prejudgment
        interest, and attorneys’ fees, litigation expenses and costs.  These
        cases are in the early stages, there has been no class certification, and
        defendants believe they have meritorious defenses.  At this stage of
        the litigation, the amount or range of loss that could result from an
        unfavorable outcome cannot be reasonably estimated.
 
 We
        are defendants in a number of other
        purported class action cases pending in various states that include allegations
        that certain consumers were overcharged for title insurance and/or related
        services. The dollar amount of damages sought has generally not been specified
        in these cases except for jurisdictional limits.  We intend to
        vigorously defend these actions.
 
 ***Regulatory
        Proceedings***
 
 We
        have
        received certain information requests and subpoenas from various regulatory
        authorities relating to our business practices and those of the title insurance
        industry.
 
 The
        Government Accountability Office
        released its final report on the title insurance industry on April 17, 2007
        (the
“Report”).  The Report makes recommendations regarding federal and
        state oversight of the title insurance industry, including but not limited
        to,
        better consumer information, consideration of the need for modification to
        the
        Real Estate Settlement Procedures Act and increased cooperation among
        regulators.
  38
  Various
        states are studying the title
        insurance product, market, pricing, business practices, and potential regulatory
        and legislative changes.  Multiple states, including California,
        Florida, Nevada, New Mexico, New York, Texas, and Washington, are examining
        pricing levels and/or title insurance regulations.  If it is
        determined that prices are not justified, rate changes may be implemented,
        including potential reductions.
 
 Some
        of
        the pricing examinations, like those conducted in Texas and New Mexico, are
        conducted annually or biannually and usually result in adjustments to the
        prices
        we can charge.  Subsequent to the 2004 Texas Title Insurance Biennial
        Hearings in August 2006, the Texas Commissioner of Insurance ordered a rate
        reduction of 3.2 percent effective February 1, 2007.  The Texas
        Department of Insurance has noticed the 2006 Texas Title Insurance Biennial
        Hearings with the rulemaking phase to begin on September 5, 2007 and the
        ratemaking phase to begin on October 16, 2007.  Subsequent to a
        hearing of the New Mexico title rate case concluded on January 18, 2007,
        on July
        20, 2007, the New Mexico Superintendent of Insurance ordered a rate reduction
        of
        6.36 percent and a change in the agent/underwriter split from 80/20 to 84.2/15.8
        effective September 1, 2007.  It is expected that a motion for
        rehearing will be filed by the New Mexico Land Title Association to request
        the
        Superintendent to reconsider the order.  If the Superintendent denies
        the motion for rehearing, the rate order can then be appealed to the New
        Mexico
        Public Regulatory Commission.  If the New Mexico Public Regulatory
        Commission upholds the rate order, it can then be appealed to a New Mexico
        district court, with further appellate review available up to the New Mexico
        Supreme Court.
 
 The
        California Department of Insurance
        (“CA DOI”) submitted to the Office of Administrative Law (“OAL”) proposed
        regulations governing the rating of title insurance and related services
        that
        could impose future rate reductions and filing of mandated statistical plans
        that impose substantially higher costs on title insurance operations in
        California.  On February 21, 2007, OAL disapproved the regulatory
        action for failure to comply with certain standards and requirements and
        on
        February 28, 2007 issued a written decision detailing the reasons for
        disapproval. On June 28, 2007, CA DOI submitted revised regulations to OAL
        that
        would become effective January 1, 2009, and OAL approved the regulations
        on July
        25, 2007 and sent them to the California Secretary of
        State.  LandAmerica and other title companies doing business in the
        California market continue to engage in discussions with the CA DOI regarding
        alternative approaches to the regulations but may pursue an appeal if such
        discussions are unsuccessful.
 
 In
        addition, a number of state inquiries have focused on captive
        reinsurance.  Captive reinsurance involves the provision of
        reinsurance by a reinsurance company that is owned by another entity, typically
        a lender, developer or other party that is a provider of real estate-related
        services.  From the inception of our captive reinsurance programs in
        1997 through 2004, reinsurance premiums paid by us to captive reinsurers
        totaled
        approximately $12.0 million.  The revenues from these programs were
        not material to our results of operations.  We voluntarily terminated
        our captive reinsurance arrangements as of February 2005, notwithstanding
        our
        belief that we had operated the programs in accordance with applicable
        law.  We settled these investigations with six states, representing
        approximately 81.4 percent of our captive reinsurance business, without
        admitting any liability.
  39
  In
        June
        2005, we established reserves of $19.0 million to cover anticipated exposure
        to
        regulatory matters nationwide, an amount which includes settlements with
        the
        California, Arizona, Nevada, Virginia, Colorado, and North Carolina departments
        of insurance.  Based on these settlements and the status of inquiries,
        we released $6.7 million of this reserve back into earnings in fiscal year
        2005
        and $0.8 million in fiscal year 2006.  The remaining reserve at June
        30, 2007 was approximately $1.9 million.
 
 We
        may
        receive additional subpoenas and/or requests for information in the future
        from
        state or federal government agencies.  We will evaluate, and we intend
        to cooperate in connection with, all such subpoenas and requests.
 
 Based
        on the information known to
        management at this time, it is not possible to predict the outcome of any
        of the
        currently pending governmental inquiries and investigations into the title
        insurance industry’s market, business practices, pricing levels, and other
        matters, or the market’s response thereto.  However, any material
        change in our business practices, pricing levels, or regulatory environment
        may
        have an adverse effect on our business, operating results and financial
        condition.
 
 **Forward-Looking
        and Cautionary Statements**
 
 This
        Quarterly Report on Form 10-Q
        contains “forward-looking statements” within the meaning of Section 27A of the
        Securities Act of 1933 and Section 21E of the Securities Exchange Act of
        1934.
        Among other things, these statements relate to our financial condition, results
        of operations and future business plans, operations, opportunities and
        prospects. In addition, we and our representatives may from time to time
        make
        written or oral forward-looking statements, including statements contained
        in
        other filings with the Securities and Exchange Commission and in our reports
        to
        shareholders. These forward-looking statements are generally identified by
        the
        use of words such as we “expect,” “believe,” “anticipate,” “could,” “should,”
“may,” “plan,” “will,” “predict,” “estimate” and similar expressions or words of
        similar import. These forward-looking statements are based upon our current
        knowledge and assumptions about future events and involve risks and
        uncertainties that could cause our actual results, prospects, performance
        or
        achievements to be materially different from any anticipated results, prospects,
        performance or achievements expressed or implied by such forward-looking
        statements. Such risks and uncertainties include: (i) our results of operations
        and financial condition are susceptible to changes in mortgage interest rates
        and general economic conditions;**(ii) changes to the participants
        in the secondary mortgage market could affect the demand for title insurance
        products;**(iii) we are subject to government regulation; (iv)
        heightened regulatory scrutiny of us and the title insurance industry, including
        any future resulting reductions in the pricing of title insurance products
        and
        services, could materially and adversely affect our business, operating results,
        and financial condition; (v) we may not be able to fuel our growth through
        acquisitions; (vi) our inability to integrate and manage successfully our
        acquired businesses could adversely affect our business, operating results,
        and
        financial condition; (vii) regulatory non-compliance, fraud or defalcations
        by
        our title insurance agents or employees could adversely affect our business,
        operating results, and financial condition; (viii) competition in our industry
        affects our revenue; (ix) significant industry changes and new product and
        service introductions require
  40
  timely
        and cost-effective responses; (x) our litigation risks include substantial
        claims by large classes of claimants; (xi) our claims experience may require
        us
        to increase our provision for title losses or to record additional reserves,
        either of which may adversely affect our earnings; (xii) key accounting and
        essential product delivery systems are concentrated in a few locations; (xiii)
        provisions of our articles of incorporation and bylaws, shareholder rights
        plan
        and applicable state corporation and insurance laws could limit another party’s
        ability to acquire us and could deprive shareholders of the opportunity to
        obtain a takeover premium for shares of common stock owned by them; (xiv)
        our
        future success depends on our ability to continue to attract and retain
        qualified employees; (xv) our conduct of business in foreign markets creates
        financial and operational risks and uncertainties that may materially and
        adversely affect our business, operating results, and financial condition;
        and
        (xvi) various external factors including general market conditions, governmental
        actions, economic reports and shareholder activism may affect the trading
        volatility and price of our common stock. For a description of factors that
        may
        cause actual results to differ materially from such forward-looking statements,
        see our Annual Report on Form 10-K for the year ended December 31, 2006,
        and
        other reports from time to time filed with or furnished to the Securities
        and
        Exchange Commission. We caution investors not to place undue reliance on
        any
        forward-looking statements as these statements speak only as of the date
        when
        made. We undertake no obligation to update any forward-looking statements
        made
        in this report.
 
 **ITEM
                  3.**
              **QUANTITATIVE
                  AND QUALITATIVE DISCLOSURES ABOUT MARKET
                  RISK**
 
 Our
        primary exposure to market risk
        relates to interest rate risk and equity price risk.  Interest rate
        risk is generally related to certain investment securities, loans receivable,
        debt and certain deposits.  We are also subject to equity price risk
        through various portfolios of equity securities.  We have operations
        in certain foreign countries, but these operations, in the aggregate, are
        not
        material to our financial condition or results of operations.
 
 The
        following table provides information about our financial instruments that
        are
        sensitive to changes in interest rates.  Values in the table present
        principal cash flows and related weighted-average interest rates by expected
        maturity dates. Actual cash flows could differ from the expected
        amounts.
  41
  
 Principal
                  Amount by Expected MaturityAverage
                  Interest Rate(Dollars
                  in millions)2007
              
              
              2008
              
              
              2009
              
              
              2010
              
              
              2011
              
              
              2012
                  and
                after
              
              
              Total
              
              
              Fair
                ValueAssets:Taxable
                  available-for-sale securities:Book
                  value
              
              $
              28.4
              
              
              
              33.7
              
              
              
              39.7
              
              
              
              30.1
              
              
              
              54.1
              
              
              
              423.0
              
              
              $
              609.0
              
              
              $
              600.9Average
                  yield
              
              
              5.4
              %
              
              
              4.7
              %
              
              
              5.1
              %
              
              
              5.0
              %
              
              
              5.4
              %
              
              
              5.4
              %
              
              
              5.3
              %Non-taxable
                  available-for-sale securities:Book
                  value
              
              $
              2.0
              
              
              
              20.7
              
              
              
              18.0
              
              
              
              30.2
              
              
              
              34.0
              
              
              
              366.4
              
              
              $
              471.3
              
              
              $
              472.0Average
                  yield
              
              
              4.6
              %
              
              
              4.4
              %
              
              
              4.0
              %
              
              
              4.0
              %
              
              
              4.2
              %
              
              
              4.2
              %
              
              
              4.2
              %Taxable
                  trading securities:Book
                  value
              
              $
              0.3
              
              
              
              1.5
              
              
              
              2.5
              
              
              
              2.9
              
              
              
              6.7
              
              
              
              81.0
              
              
              $
              94.9
              
              
              $
              94.9Average
                  yield
              
              
              5.7
              %
              
              
              5.1
              %
              
              
              6.0
              %
              
              
              5.2
              %
              
              
              4.7
              %
              
              
              5.4
              %
              
              
              5.3
              %Non-taxable
                  trading securities:Book
                  value
              
              $
              0.5
              
              
              
              -
              
              
              
              2.9
              
              
              
              0.5
              
              
              
              3.6
              
              
              
              36.1
              
              
              $
              43.6
              
              
              $
              43.6Average
                  yield
              
              
              3.6
              %
              
              
              -
              
              
              
              4.3
              %
              
              
              3.6
              %
              
              
              3.8
              %
              
              
              4.2
              %
              
              
              4.2
              %Preferred
                  stock available-for-sale:Book
                  value
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              $
              10.1
              
              
              $
              10.1
              
              
              $
              10.0Average
                  yield
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              3.6
              %
              
              
              3.6
              %Loans
                  receivable, excluding reserves, discounts and other costs:Book
                  value
              
              
              -
              
              
              $
              1.0
              
              
              
              3.0
              
              
              
              1.4
              
              
              
              8.4
              
              
              
              574.7
              
              
              $
              588.5
              
              
              $
              589.3Average
                  yield
              
              
              -
              
              
              
              8.6
              %
              
              
              7.6
              %
              
              
              7.4
              %
              
              
              7.1
              %
              
              
              7.0
              %
              
              
              7.0
              %Liabilities:Interest
                  bearing passbook liabilities:Book
                  value
              
              $
              104.4
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              $
              104.4
              
              
              $
              104.4Average
                  yield
              
              
              5.0
              %
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              5.0
              %Interest
                  bearing certificate of deposit liabilities:Book
                  value
              
              $
              68.2
              
              
              
              101.8
              
              
              
              36.9
              
              
              
              20.4
              
              
              
              5.1
              
              
              
              1.6
              
              
              $
              234.0
              
              
              $
              247.0Average
                  yield
              
              
              5.2
              %
              
              
              5.1
              %
              
              
              4.6
              %
              
              
              4.7
              %
              
              
              5.2
              %
              
              
              5.0
              %
              
              
              5.0
              %
 
 Changes
        in maturities and yields from
        December 31, 2006 to June 30, 2007 primarily relate to timing of purchases
        and
        sales of securities and the effect that the securities sold or purchased
        have on
        the average portfolio yield, timing of payments received from, and the extension
        of loans to, customers in the commercial real estate market and timing of
        amounts held for customers.
 
 We
        also have non-interest bearing
        passbook deposit liabilities related to escrow balances of $185.8
        million.  In addition, during first quarter 2007, we transferred
        $142.6 million of our
  42
  fixed-maturity
        securities from available-for-sale securities to trading
        securities.  This transfer introduced incremental interest rate risk
        into our business.  We do not expect the incremental interest rate
        risk to have a material affect on our financial statements.  For
        further details, see Note 4, “Investments” of the Notes to Consolidated
        Financial Statements in Part I, Item 1 of this report.
 
 There
        have been no material changes in
        other market risks that affect us since the filing of our Form 10-K for the
        year
        ended December 31, 2006.
 
 **ITEM
                  4.**
              **CONTROLS
                  AND PROCEDURES**
 
 **Evaluation
        of Disclosure Controls and Procedures**
 
 We
        maintain disclosure controls and
        procedures that are designed to provide assurances that information required
        to
        be disclosed by us in the reports that we file or submit under the Securities
        Exchange Act of 1934 (the “Exchange Act”), as amended, is recorded, processed,
        summarized and reported within the time periods required by the Securities
        and
        Exchange Commission.
 
 Our
        management, under the direction of
        our Chief Executive Officer and our Chief Financial Officer, has evaluated
        the
        effectiveness of the design and operation of our disclosure controls and
        procedures (as defined in the Exchange Act Rules 13a-15(e) and 15d-15(e))
        as of
        June 30, 2007.  Based upon this evaluation our management, including
        our Chief Executive Officer and our Chief Financial Officer, has concluded
        that
        our disclosure controls and procedures were effective as of June 30,
        2007.
 
 **Changes
        in Internal Controls**
 
 There
        were no changes in our internal
        controls over financial reporting that occurred during the quarter ended
        June
        30, 2007 that have materially affected, or are reasonably likely to materially
        affect, our internal controls over financial reporting.
 
 
 **PART
        II.  OTHER INFORMATION**
 
 **ITEM
                  1.**
              **LEGAL
                  PROCEEDINGS**
 
 The
        information contained in Note 8
“Commitments and Contingencies” of the Notes to Consolidated Financial
        Statements filed as Part I, Item 1 of this Quarterly Report on Form 10-Q
        is
        incorporated herein by reference.
 
 **ITEM
                  1A.**
              **RISK
                  FACTORS**
 
 Our
        business is subject to various
        risks, including the risks described in our Form 10-K for the fiscal year
        ended
        December 31, 2006 and the risk described below.  Our
        business,
  43
  operating
        results and financial condition could be materially and adversely affected
        by
        any of these risks. Please note that additional risks not presently known
        to us
        or that we currently deem immaterial may also impair our business and
        operations.
 
 **The
        trading volatility and price of our common stock may be affected by various
        external factors.**
 
 The
        volatility and price of our common stock are subject to various factors over
        which we have no control, such as general market conditions and governmental
        actions or reports about economic activity that may have a market-moving
        impact,
        regardless of whether the action or activity directly relates to our business.
        In addition, shareholder activism that seeks to influence corporate policies
        or
        affect our business strategies may lead to speculative trading activity in
        our
        common stock.  Any substantial trading activity, whether due to
        speculation or otherwise, has the potential to affect the market price and
        volatility of our stock.  We cannot predict the timing or impact of
        these factors on the volatility or price of our common stock.
 
 **ITEM
                  2.**
              **UNREGISTERED
                  SALES OF EQUITY SECURITIES AND USE OF
                  PROCEEDS**
 
 (c)           The
        following table sets forth the details of purchases of common stock under
        our
        share purchase plans and our Executive Voluntary Deferral Plan and Outside
        Directors Deferral Plan that occurred in second quarter 2007:
 
 Period
              
              Total
                  Number
                of
                  Shares
                Purchased
              
              
              Average
                  Price
                Paid
                  per Share
              
              
              Total
                  Number of Shares
                Purchased
                  as Part of
                Publicly
                  Announced
                Plans
                  or Programs
              
              
              Maximum
                  Number of
                Shares
                  that May Yet
                Be
                  Purchased Under
                the
                  Plans or ProgramsApril
                  1 through April 30, 2007
              
              
              124,299
              
              
              $
              78.99
              
              
              
              114,000
              
              
              
              1,944,290May
                  1 through May 31, 2007
              
              
              276,830
              
              
              $
              87.63
              
              
              
              276,000
              
              
              
              1,667,460June
                  1 through June 30, 2007
              
              
              84,815
              
              
              $
              104.00
              
              
              
              84,000
              
              
              
              1,582,645
 
 (1)
              A
                  total of 11,944 shares of our common stock were purchased in connection
                  with two employee benefit plans during the second quarter
                  2007.  These repurchases were made in open-market transactions
                  on behalf of a trust maintained by us for the Executive Voluntary
                  Deferral
                  Plan and the Outside Directors Deferral
                  Plan.
 
 (2)
              In
                  February 2007, we announced an additional share repurchase plan
                  providing
                  for the purchase of up to 1,500,000 shares of our common stock
                  expiring at
                  the end of October 2008.  During second quarter 2007, we
                  repurchased 474,000 shares under this purchase
                  plan.
 
  44
  **ITEM
        4.                SUBMISSION
        OF MATTERS TO A VOTE OF SECURITY HOLDERS**
 
 a)           The
        Annual Meeting of Shareholders of the Company (the “Meeting”) was held on May
        15, 2007.
 
 b)           At
        the Meeting, the shareholders elected five directors to serve three-year
        terms.  The voting with respect to each nominee was as
        follows:
 
 Nominee
              
              Votes
                  For
              
              Votes
                  WithheldTheodore
                  L. Chandler, Jr.
              
              13,899,648
              
              434,796Charles
                  H. Foster, Jr.
              
              13,776,941
              
              557,503Dianne
                  M. Neal
              
              14,030,269
              
              304,175Robert
                  T. Skunda
              
              13,998,260
              
              336,184Marshall
                  B. Wishnack
              
              13,715,539
              
              618,905
 
 The
        terms of office for the following
        directors continued after the meeting:  Janet A. Alpert, Gale K.
        Caruso, Michael Dinkins, John P. McCann, Robert F. Norfleet, Jr., Julious
        P.
        Smith, Jr., Thomas G. Snead, Jr. and Eugene P. Trani.
 
 c)           The
        shareholders also approved an amendment to the Company’s Articles of
        Incorporation to revise the Article pertaining to shareholder approval as
        noted
        below:
 
 Article
                  Pertaining to Shareholder ApprovalVotes
                  For
              
              11,529,091Votes
                  Against
              
              1,808,120Abstain
              
              68,096Non
                  Votes (1)
              
              929,137(1)A
                  non vote occurs
                  when a broker or other nominee holding shares for a beneficial
                  owner
                  indicates a vote on one or more proposals, but does not indicate
                  a vote on
                  other proposals because the broker or other nominee does not have
                  discretionary voting power as to such proposals and has not received
                  voting instructions from the beneficial owner as to such
                  proposals.
 
 d)           Finally,
        at the Meeting the shareholders ratified Ernst & Young LLP as the Company’s
        independent registered public accounting firm for the 2007 fiscal year as
        noted
        below:
 
 Appointment
                  of Independent Registered Public AccountantsVotes
                  For
              
              14,198,374Votes
                  Against
              
              92,093Abstain
              
              43,977
     45
    **ITEM
                  6.**
              **EXHIBITS**
 
 No.
              Description31.1
              Rule
                  13a-14(a) Certification of Chief Executive Officer*31.2
              Rule
                  13a-14(a) Certification of Chief Financial Officer*32.1
              Statement
                  of Chief Executive Officer Pursuant to 18 U.S.C. Section
                  1350*32.2
              Statement
                  of Chief Financial Officer Pursuant to 18 U.S.C. Section
                  1350*
  46
  **SIGNATURE**
 
 Pursuant
        to the requirements of the
        Securities Exchange Act of 1934, the registrant has duly caused this report
        to
        be signed on its behalf by the undersigned thereunto duly
        authorized.
 
 
 **LANDAMERICA
                  FINANCIAL GROUP, INC**.(Registrant)Date:August
                  1, 2007
              
              /s/
                  Christine R. VlahcevicChristine
                  R. VlahcevicSenior
                  Vice President-Corporate
                  Controller(Principal
                  Accounting Officer)
 
 
 
 
  47
  **EXHIBIT
        INDEX**
 
 No.
              Description31.1
              Rule
                  13a-14(a) Certification of Chief Executive Officer*31.2
              Rule
                  13a-14(a) Certification of Chief Financial Officer*32.1
              Statement
                  of Chief Executive Officer Pursuant to 18 U.S.C. Section
                  1350*32.2
              Statement
                  of Chief Financial Officer Pursuant to 18 U.S.C. Section
                  1350*
 
 *
        Filed
        herewith.
 
  48