Title Insurance

Ted Jones talks about the Real Estate Market

[youtube=http://www.youtube.com/watch?v=A1npaKxP42E&hl=en&fs=1]

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Economic Downturn will Raise Hurdles for Title Companies

Recently, an expert on the title insurance market told the audience at the Casualty Loss Reserve Seminar that the economic downturn the markets have seen recently will product a number of new hurdles for the title insurance industry.

Joseph Petrelli, president of Demotech, an actuarial consulting and financial analysis firm, told the audience that the peak year for the title insurance market was 2005, with $16.8 billion in direct written premiums countrywide that year, but through the first and second quarters of 2008 there had been up to a 20% decline in premiums.

Paul Struzzieri, a principal and consulting actuary at Milliman, noted that there are a series of problems exclusive to title insurance that present challenges for both insurers and actuaries.

Unlike property/casualty insurance policies, in title insurance the loss is typically incurred prior to the effective date. This is a problem because it means that there is no stated expiration date to title policies. So it's possible that someone could get a claim 60 years out as long as it related to a condition that existed prior to the effective date.

One item that actuaries need that makes it difficult for them is the fact that title insurers don't know if policies are still in force because the owner or the lender is under no obligation to notify the title insurer when they sell the home or the mortgage is refinanced.

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Slight glimmer of hope

While there has not been a lot to cheer about in the title insurance game, there is a slight glimmer of hope that should give officials in the space some hope that brighter days are ahead. The first positive sign are some government rescue measures that are on the way. But there are still other small, but positive signs to look to.

For instance, according to a recent published report, a number of title insurance companies also pay steady dividends. Those dividends have seen their yields go up as the share prices have dropped. First American and Fidelity National are two dividend payers who have branched out into other businesses. As a result of that, both firms have seen their first-half earnings rise ahead of their competitions.

First American closed Oct. 10 at $23.90, which is well off its 52-week high of $42; its 88-cent dividend gives it a yield of 3.6%. Fidelity National closed at $10.35, down from its year-high of $20.38; a $1.20 annual dividend makes for a yield of 11.3%. Once again, not the time to make that large purchase, but a sign that there is brighter days ahead.

New Title Insurance Blog

Stewart Title of New Jersey has started a new blog. It's located at www.stgnjtalk.com/titletalk

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Online Title Insurance

MyClosingSpace is gone - now we have  Entitle Direct Insurance These guys are an underwriter that sells directly to the consumer without going through an agent.  How is this gonna work?

HUD Touts Homeless Decline

I saw this headline on an article from the  Affordable Housing Website and the first thing I thought was "Yeah of course there is a decline. You gave em all mortgages they couldn't afford and now we are all paying the price."

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