The National Association of Insurance Commissioners has decided to ramp up its oversight of title insurers.
The problem stems from problems at small and regional title companies, not the four large title companies, according to Paul Bauer, a vice president and senior credit officer on the insurance team at Moody’s Investors Service.
Bauer, who covers three of the large title insurers, says the larger ones are more prepared to weather the current storm caused by the housing crisis than the small ones.
“They have more scale and more flexibility from a cost-management standpoint,” he says.
He adds that title insurers are “different from other [property and casualty] insurers because a lot of what needs to be done is expense management.”
The NAIC’s decision for increased oversight was made by the Title Insurance Task Force at the NAIC’s Fall National Meeting, which ended here Sunday.
The decision follows the failure of three title insurance companies so far in 2011.
The task force plans to work with other NAIC working groups to modernize solvency regulation of the industry. These efforts will include looking at recent industry failures, developing risk-based capital requirements, early warning tools, and risk-focused examination guidelines.
The core title insurance industry problem is that it “continues to deal with the aftermath of the great housing price bubble and its painfully slow deflation,” Bauer says in an April report.
He adds, “We expect title insurance companies to be challenged over the medium term by a shrinking revenue base and lower income due to a drop in mortgage refinancings accompanied by only a mild, if any, uptick in overall home-sale transactions.”
Posted via email from Title Insurance by traditionta FHA Update: On November 18, 2011, the President signed into law H.R. 2112, Consolidated and Further Continuing Appropriations Act 2012 (HR2112). Section 238 of HR 2112 re-establishes the FHA loan limit at the higher of the dollar limit in Section 203(b)(2) or the dollar limit prescribed in Section 202 of the Economic Stimulus Act of 2008 for Forward mortgages. Forward Mortgages: Therefore, effective for all Forward mortgages with a case number assigned on, or after, November 18, 2011 through December 31, 2011, the loan limits referenced in Mortgagee letter 10-40 shall be in effect. As a reminder, Mortgagee Letter 11-29 still applies to the time period 10/1/11 through 11/17/11: • Loans that did not have credit approval on, or before, 9/30/11 are subject to the lower limits that were in effect 10/1/11 through 11/17/11. • Loans that had credit approval on or before 9/30/11 and FHA to FHA refinances may be eligible for exceptions to those loan limits as defined in Mortgagee Letter 11-29. The Department will be issuing a Mortgagee Letter by mid-next week that will include more detailed guidance and applicable updated loan limit tables for 2012. We expect supporting system changes to be completed within that same time frame. HECM: Lenders are reminded that the maximum claim amount for HECMs is not affected by HR 2112 and the maximum claim amount for HECM remains at $625,500 as stated in Mortgagee Letters 10-40 and 11-29. This loan limit will remain the same for 2012 and will be included in the pending Mortgagee Letter.
Posted via email from Title Insurance by traditionta FHA Update: On November 18, 2011, the President signed into law H.R. 2112, Consolidated and Further Continuing Appropriations Act 2012 (HR2112). Section 238 of HR 2112 re-establishes the FHA loan limit at the higher of the dollar limit in Section 203(b)(2) or the dollar limit prescribed in Section 202 of the Economic Stimulus Act of 2008 for Forward mortgages. Forward Mortgages: Therefore, effective for all Forward mortgages with a case number assigned on, or after, November 18, 2011 through December 31, 2011, the loan limits referenced in Mortgagee letter 10-40 shall be in effect. As a reminder, Mortgagee Letter 11-29 still applies to the time period 10/1/11 through 11/17/11: • Loans that did not have credit approval on, or before, 9/30/11 are subject to the lower limits that were in effect 10/1/11 through 11/17/11. • Loans that had credit approval on or before 9/30/11 and FHA to FHA refinances may be eligible for exceptions to those loan limits as defined in Mortgagee Letter 11-29. The Department will be issuing a Mortgagee Letter by mid-next week that will include more detailed guidance and applicable updated loan limit tables for 2012. We expect supporting system changes to be completed within that same time frame. HECM: Lenders are reminded that the maximum claim amount for HECMs is not affected by HR 2112 and the maximum claim amount for HECM remains at $625,500 as stated in Mortgagee Letters 10-40 and 11-29. This loan limit will remain the same for 2012 and will be included in the pending Mortgagee Letter.
Posted via email from Title Insurance
Continuing Ed for Title Agents
FHA LENDING LIMIT UPDATE
Continuing Ed for Title Agents
FHA LENDING LIMIT UPDATE
FHA LENDING LIMIT UPDATE
Continuing Ed for Title Agents
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