The Daily Report details the ruling: "The federal appeals court in Atlanta has given a title insurance company a chance to recover some of the $742,000 it lost in a Georgia mortgage fraud scheme."
"Attorney's Title Insurance Fund Inc. paid Long Beach Mortgage Company after it turned out that the property in Lithonia, Ga., was in default and was actually owned by another lender.
The U.S. government prosecuted the fraud perpetrators. One of them agreed to forfeit the proceeds remaining from the Long Beach loan as part of his sentence."
"The title insurer sought to recover its loss, but a federal judge in Augusta denied its petition, saying the government's interest in the forfeited funds came first."
Tuesday, November 18, 2008
Monday, November 17, 2008
Fidelity aquires LandAmerica
MarketWatch reports: "LandAmerica shareholders will get 0.993 shares of Fidelity National for each stock they hold. The deal values LandAmerica at almost $130 million, based on the closing price of Fidelity National shares on Thursday."
"Title insurance protects home buyers against losses arising from disputes over the ownership of their property. As the housing slump has deepened, these insurers have been getting more claims, cutting into profit."
"Indeed, LandAmerica reported losses in the first half of 2008. The company also had more debt than some of its rivals, leaving it more vulnerable. Shares of the Richmond, Va.-based company were down 86% this year, through Thursday's close, while Fidelity National stock had lost 43%."
"'The unprecedented credit freeze and depressed real estate market have negatively impacted our business to the point that it has become increasingly difficult for LandAmerica to remain an independent public company,' Chief Executive Theodore Chandler said in a statement. 'This combination is in the best interest of our shareholders, customers and employees.'"
"Title insurance protects home buyers against losses arising from disputes over the ownership of their property. As the housing slump has deepened, these insurers have been getting more claims, cutting into profit."
"Indeed, LandAmerica reported losses in the first half of 2008. The company also had more debt than some of its rivals, leaving it more vulnerable. Shares of the Richmond, Va.-based company were down 86% this year, through Thursday's close, while Fidelity National stock had lost 43%."
"'The unprecedented credit freeze and depressed real estate market have negatively impacted our business to the point that it has become increasingly difficult for LandAmerica to remain an independent public company,' Chief Executive Theodore Chandler said in a statement. 'This combination is in the best interest of our shareholders, customers and employees.'"
Friday, March 14, 2008
Title costs tied to property’s value
GazetteXtra.com reports, "The cost of title insurance is based on the price of the property being bought or sold or the amount of the mortgage being refinanced. It starts with a base fee and then goes up based on the value, with specific price points along the way."
"The Web site www.bankrate.com said that in 2006 the average cost of title work in Wisconsin was about a half percent of the loan value."
"Profitability for the title insurance industry is cyclical. The booming housing market of the early 2000s, coupled with increased mortgage refinancing, benefited title insurers. In fact, the industry posted $16.6 billion in revenue in 2006, up from $5.1 billion 10 years earlier."
"But the housing pendulum has swung, and revenues are shrinking and costs rising as home prices have decreased and increases in foreclosures have lead to more title disputes. Several local title insurance companies have laid off employees or cut hours and benefits."
"The profits of the good years are expected to cover the lean years, when fixed costs driven by evolving technology continue with little regard to revenues."
"Competition in the local marketplace also has increased. Many companies with no real ties to the community have entered the market in search of real estate agents and mortgage lenders to send title insurance business their way."
"The result has been a drop in prices and quality, long-time Janesville title agents said."
"The Web site www.bankrate.com said that in 2006 the average cost of title work in Wisconsin was about a half percent of the loan value."
"Profitability for the title insurance industry is cyclical. The booming housing market of the early 2000s, coupled with increased mortgage refinancing, benefited title insurers. In fact, the industry posted $16.6 billion in revenue in 2006, up from $5.1 billion 10 years earlier."
"But the housing pendulum has swung, and revenues are shrinking and costs rising as home prices have decreased and increases in foreclosures have lead to more title disputes. Several local title insurance companies have laid off employees or cut hours and benefits."
"The profits of the good years are expected to cover the lean years, when fixed costs driven by evolving technology continue with little regard to revenues."
"Competition in the local marketplace also has increased. Many companies with no real ties to the community have entered the market in search of real estate agents and mortgage lenders to send title insurance business their way."
"The result has been a drop in prices and quality, long-time Janesville title agents said."
A necessary evil: Confusion clouds title insurance
Gazette Xtra writes, "Whether the discussion is mortgage foreclosures, consolidation in the banking industry, declining auto sales or struggling retailers, the nation’s housing market has been a hot topic in the last 18 months."
"Often absent from the discussion, however, is title insurance, a $16 billion industry that consumer advocates and government regulators say few people understand yet blindly feed whenever they buy, sell or refinance a home or property."
"Consumer groups say buyers aren’t clear on what title insurance is, rarely question how much it costs and routinely follow the recommendation of their real estate agent or banker on whom to buy it from."
"Title insurance covers claims and legal fees for homebuyers and lenders if problems arise over ownership of the property. It often covers errors in deeds, boundary disputes, fraud and forgery, liens for unpaid taxes or bills and missing heirs who may appear with a claim to the property."
"Often absent from the discussion, however, is title insurance, a $16 billion industry that consumer advocates and government regulators say few people understand yet blindly feed whenever they buy, sell or refinance a home or property."
"Consumer groups say buyers aren’t clear on what title insurance is, rarely question how much it costs and routinely follow the recommendation of their real estate agent or banker on whom to buy it from."
"Title insurance covers claims and legal fees for homebuyers and lenders if problems arise over ownership of the property. It often covers errors in deeds, boundary disputes, fraud and forgery, liens for unpaid taxes or bills and missing heirs who may appear with a claim to the property."
MyClosingSPACE.com Announces Nationwide Expansion of Its Title Insurance and Closing Services Business
The Earth Times reports, "MyClosingSPACE.com, the country’s first online title insurance and closing services company, has announced it is now available to new homebuyers, mortgage refinancers, attorneys, lenders, and realtors nationwide. The decision was made after the title company successfully test marketed its innovative online business in New Jersey, Florida, Pennsylvania, and New York."
"MyClosingSPACE.com opened in November of 2006, offering title insurance and closing services in New Jersey and Florida as a test for what it called a revolutionary new title industry business model committed to the lowest rates allowable by state and federal laws, the absence of junk fees, and faster service. The company expanded into Pennsylvania several months later, and six months ago, the move into New York was made."
"Company president, Gregory Schmidt explains why myClosingSPACE.com’s expansion comes at the right time. 'Obviously, this is a challenging time for the housing industry, and no one really knows what changes will come as a result. But, one thing is certain – real estate professionals and consumers will have to become more efficient and smarter, and that certainly includes buying title insurance and closing services.'"
"MyClosingSPACE.com opened in November of 2006, offering title insurance and closing services in New Jersey and Florida as a test for what it called a revolutionary new title industry business model committed to the lowest rates allowable by state and federal laws, the absence of junk fees, and faster service. The company expanded into Pennsylvania several months later, and six months ago, the move into New York was made."
"Company president, Gregory Schmidt explains why myClosingSPACE.com’s expansion comes at the right time. 'Obviously, this is a challenging time for the housing industry, and no one really knows what changes will come as a result. But, one thing is certain – real estate professionals and consumers will have to become more efficient and smarter, and that certainly includes buying title insurance and closing services.'"
Tuesday, March 11, 2008
Suit accuses title companies of breaking antitrust laws
The Seattle Post Intelligencer reports, "Washington resident sued four groups of title insurers Monday in federal court in Seattle, alleging that they violated state and federal antitrust laws by agreeing not to compete based on the price paid by consumers."
"Plaintiff Timothy Lubic bought title insurance from one of the 12 defendant companies, which operate as four groups. Together, the companies account for more than 85 percent of title-insurance premiums consumers pay in Washington, the suit alleges."
"Title insurance protects property buyers against claims that could interfere with their rights to use and resell their property. The choice of a title insurer is typically made for buyers by their lawyers, brokers or agents, and most buyers don't know how much they will pay, or to which company, until closing."
"Plaintiff Timothy Lubic bought title insurance from one of the 12 defendant companies, which operate as four groups. Together, the companies account for more than 85 percent of title-insurance premiums consumers pay in Washington, the suit alleges."
"Title insurance protects property buyers against claims that could interfere with their rights to use and resell their property. The choice of a title insurer is typically made for buyers by their lawyers, brokers or agents, and most buyers don't know how much they will pay, or to which company, until closing."
Title insurance outlook turns negative
Forbes reports: "Fitch Ratings said the outlook on US title insurers has turned negative due to a sharp decline in revenue and profits for the fourth quarter and full year 2007, as well as expectations for further deterioration in 2008 and 2009."
"Fitch said the continued unfavourable credit and property market conditions spurred by the subprime mortgage crisis support the revised forecast."
"As title insurance is a cyclical business, ratings are assigned at a level that can withstand a normal industry cycle. However, the downtrend may be unusually severe and longer in duration than past cycles, and create significant pressure on some company ratings, the agency said."
"Fitch said leading indicators of future title insurance revenues, including mortgage origination and title insurance order flow, reveal that further challenges lie ahead."
"Fitch said the continued unfavourable credit and property market conditions spurred by the subprime mortgage crisis support the revised forecast."
"As title insurance is a cyclical business, ratings are assigned at a level that can withstand a normal industry cycle. However, the downtrend may be unusually severe and longer in duration than past cycles, and create significant pressure on some company ratings, the agency said."
"Fitch said leading indicators of future title insurance revenues, including mortgage origination and title insurance order flow, reveal that further challenges lie ahead."
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