Lowenstein Sandler PC

USA

October 25 2010

According to the Mortgage Bankers Association’s (MBA) Commercial/Multifamily Delinquency Report, delinquency rates were mixed in the second quarter of 2010 for commercial/multifamily mortgage investor groups. As the delinquency rate for commercial real estate loans in mortgage backed securities (CMBS) reached an all-time high, the delinquency rate for other groups of mortgages, though still elevated, remains below levels seen in the early 1990s, and in some cases by large margins.

MBA reports that between the first quarter and second quarter of 2010, the 60+ day delinquency rate on loans held in life company portfolios decreased by 0.02 percentage points to 0.29 percent; the 60+ day delinquency rate on multifamily loans held or insured by Fannie Mae increased 0.01 percentage points to 0.80 percent; the 60+ day delinquency rate on multifamily loans held or insured by Freddie Mac increased 0.03 percentage points to 0.28 percent; and the 90+ day delinquency rate on loans held by FDIC-insured banks and thrifts remained unchanged at 4.26 percent.

Data assembled by Trepp, an independent provider of CMBS and commercial mortgage information, indicated that the delinquency rate for commercial real estate loans in CMBS has steadily accelerated, finally surpassing 9 percent after three consecutive months of somewhat moderate increases. The rate in September 2010 was up 13 basis points to 9.05 percent after increases of 21 basis points in August 2010; 12 basis points in July 2010; and 17 basis points in June 2010 and represents the highest delinquency rate since the development of the CMBS product line back in 1997.

To see table please click here.

However, this data does not tell the full story. While the delinquency rate increased somewhat significantly, an independent rating agency, Fitch Ratings, indicated that the increase was somewhat offset by a record number of loan resolutions. Fitch noted that nearly $2.1 billion of CMBS loans disappeared from its delinquency index in August through a combination of liquidations, repayments upon refinancing, corrections and modifications. It would appear that while delinquent loans are being worked out at an increased rate, the overall volume of new delinquencies continues to grow at a steady level.

The “Mortgagegate” Scandal: Congratulations America, You’re Now in the Title-Insurance Business

[Editor’s Note: On Wednesday, in the latest development in the “Mortgagegate” scandal, Fidelity National Financial Inc., the largest U.S. title-insurance firm, reversed course and said it wouldn’t require an indemnity agreement before insuring individual foreclosed properties. Money Morning’s Shah Gilani, a retired hedge-fund manager, warns that there’s a deep game being played, and provides investors with detailed insights, and advice on the steps to take.]

By Shah Gilani, Contributing Editor, Money Morning

U.S. taxpayers already own pieces of such problem-plagued companies as General Motors Corp., Chrysler LLC, American International Group Inc. (NYSE: AIG), Fannie Mae (OTC: FNMA) and Freddie Mac (OTC: FMCC). Now the increasingly problematic “Mortgagegate” saga could land American taxpayers in the trouble-ridden title-insurance business.

On Oct. 8, Bank of America Corp. (NYSE: BAC) indemnified Fidelity National Financial Inc. (NYSE: FNF) against any losses that Fidelity might sustain in litigation over title insurance it writes on foreclosed homes – the same homes, coincidentally, that Bank of America wants to sell to new buyers.

This arrangement amounts to U.S. taxpayers, who are the ultimate backers of the Federal Deposit Insurance Corp. (FDIC), backstopping a giant, publicly held title-insurance company, which is backstopping a huge commercial bank, so that the bank can sell properties that it might not have proper title to.

It sounds like a Wall Street version of the “Six Degrees of Kevin Bacon,” but it’s no game – it’s a daisy-chain scheme that once again sets American households up as the biggest losers.

Click throught to the original article on this one. This guy got some interesting feedback

Posted via email from Title Insurance
Continuing Ed for Title Agents

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A.M. Best Special Report: Title Results Rebound in 2009 and 2010, but Challenges Remain

October 30, 2010 admin

OLDWICK, N.J.–(BUSINESS WIRE)–After the real estate market freefall in 2008—when title insurance revenues fell sharply and most major title insurance underwriters posted net losses—operating results rebounded in 2009, although total industry written premiums declined from 2008 levels. During the first quarter of 2010, however, title insurance revenues—helped partly by federal policy and tax incentives—improved compared with the similar period in 2009.

While revenues were down in the second quarter of 2010, most major underwriters posted positive operating margins through the first six months of the year. Despite economic uncertainties and housing market challenges—particularly given recent foreclosure processing issues—A.M. Best Co. has revised its rating outlook for the title sector to stable from negative, given strengthened capitalization and improved operating performance trends.

In 2009, the industry reported:

An approximate 22% increase in surplus, due to improved operating performance as well as capital contributions.

Title insurance direct premiums written were down about 9%, year over year; a smaller decline compared with that of 2008.

A yearly net income of $429 million, compared with a net loss of $416 million in 2008, driven by a pretax operating gain of $418 million.

The net underwriting loss of $96 million was far smaller compared with 2008’s relatively large underwriting loss of $688 million. As a result, the industry’s combined ratio (known as composite ratio) improved to 102.9% from 109.1% in 2008.

Investment income improved to $552 million from $380 million in 2008, which more than offset the modest underwriting loss resulting in an operating gain.

Access a copy of this special report. BestWeek subscribers can download a PDF copy of all special reports as well as the associated spreadsheet data. Non-subscribers can access an excerpt of each special report and purchase individual reports and spreadsheet data.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.