November 4, 2010-Houston-

During the Institute for Regional Forecasting’s biannual economic and real estate forecast, Ted C. Jones, chief economist, Stewart Title, addressed many people’s questions regarding the future of the national and local economies and whether or not the national stimulus plan has really worked and if, indeed, the U.S. economy is really out of a recession.

The presentation, “History May Not Repeat Itself, But it Certainly Does Rhyme” – Mark Twain, held at the Hyatt Regency Houston Hotel in downtown Houston, provided the newest economic statistics on the global, national and local economies and included Jones’ interpretation of what they all mean, especially to Houstonians and the regional economy.

Jones questioned whether an economic recovery could be realized without adding jobs. While he does see job growth in the future, he said it would likely be ‘tepid’ nationwide in the coming 18 to 24 months. With statistics and an analysis of trends and econometric models, Jones dissected the current state of affairs of the global, national and local economies. In contrasting Houston’s economic performance in the past decade, Jones noted that while the U.S. lost 1.9 million jobs since September 2000, Houston added 300,000 jobs.

He indicated that the national economy basically is sputtering on fumes regarding job growth. He noted that deficit spending at a national level is not sustainable. The U.S. had $10.7 trillion of national debt (excluding Social Security, Medicare and Medicaid commitments) at the end of 2008 and is projected to grow an additional $10.53 trillion by 2020-and that assumes that there are no new Federal programs, that cap and trade does not pass, and that health care is essentially revenue neutral.

The national economy remains on life support from government spending. As the Federal Reserve System heads into a second round of quantitative easing (known as QE2), it shows little progress has been made by the multi-trillion dollar stimulus in the past 21 months. Just as University of Houston economist Barton Smith stressed the need for an exit plan by both the Federal Reserve Bank and the U.S. government in his economic forecast last May, Jones reiterated that no true recovery can be proclaimed until all of these economies can start growing again without life support.

5 11 2010

The National Association of Independent Land Title Agents defines an Independent Title Agent as follows: “Any individual or entity authorized and licensed to issue title insurance policies that is not controlled by, whether directly or indirectly, a title insurance company/underwriter, bank, mortgage company, mortgage broker, real estate firm (including agents and brokers), builders, developers, appraisers, surveyors, any subsidiaries thereof, or by any other referral source.”

They call them CBA’s or AfBA’s (Controlled Business Arrangements and Affiliated Business Arrangements) and they are legal as long as the nature of the business is disclosed to the buyer. The disclosure consists of a piece of paper stating basically XYZ Title Agent has a Controlled Business Arrangement with Mega Bank … Please sign here.

But what does that arrangement really mean? Well, Mega Bank owns XYZ Title Agent and XYZ Title Agent does what Mega Bank tells it to do.
So what does that mean to the buyer? Let’s say that Mr. Buyer is purchasing a foreclosed property and XYZ Title receives the title opinion from the closing attorney and that opinion discloses some problems with the foreclosure. As chances have it Mega Bank was the foreclosing lender. XYZ Title spots this and knowing that these foreclosure errors will bother Mega Bank, issues Mr. Buyer a clean title policy. Great for Mr. Buyer – right? Not really, you see the error that XYZ Title agent so graciously ignored was the fact the Out of State Foreclosed Owner was never provided notice of the foreclosure. Mr. Buyer found this out when the former owner knocked on the door and asked why someone was living in his house. Sure, the Title Insurance Underwriter will probably cover the claim, but that can take years. Does Mr. Buyer really need the stress of worrying that he might lose his home?
An Independent Title Agent would have refused to permit the transaction to close until the title was clear! CBA’s and AfBA’s have a benefit, but it’s not for the buyer, it’s for the owner of the CBA or AfBA.
For more information about the value of independent title agents visit http://www.nailta.org/

Posted via email from Title Insurance
Continuing Ed for Title Agents

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Mortgage foreclosures in the spotlight

November 5, 2010 admin

Issues regarding the process of handling mortgage foreclosures have cap-tured widespread attention during the last several weeks. While this is largely a documentation issue that is likely to be rectified relatively promptly by most lenders and servicers, allegations that large numbers of foreclosures have been processed without an adequate review of the relevant facts and that documents used in the foreclosure process did not meet legal require-ments have raised broad concerns among the government and industry, in-vestor and consumer groups about the mortgage finance business. Thus, the continuing task is the reconstruction of the credibility of mortgage finance systems.

On the ground, there are significant aftershocks from the documentation disclosures, in the form of market and regulatory reaction:

Borrowers’ lawyers have brought a range of challenges in an effort to protect them from foreclosure, including allegations regarding allegedly improper foreclosure practices, claims relating to the use of the Mortgage Electronic Recording System (MERS) and challenges to the operation of the Home Af-fordable Modification Program (HAMP) in regard to loan modifications.

The Attorneys General of all 50 states have announced a coordinated investigation of the mortgage servicing industry.

The Office of the Comptroller of the Currency has reportedly initiated examinations of the foreclosure and loss-mitigation procedures at large national banks.

The Federal Housing Finance Agency has in-structed Fannie Mae and Freddie Mac to re-quire their servicers to review foreclosure-related actions to ensure that any affidavits that have been filed were correct and com-plied with applicable law.

Institutional investors, as well as the Federal Reserve Bank of New York, are seeking with increasing insistence to have the mortgage-backed securities they hold repurchased, based on questions regarding the servicing or credit quality of the underlying mortgage loans.

To the extent that issues related to foreclo-sure processing may impact the stock price or financial performance of bank holding companies, shareholders may explore the possibility of alleging securities violations or mounting derivative actions against direc-tors or officers.

Firms that participate in all phases of the home mortgage process from origination to securitiza-tion, servicing and foreclosure are likely to be drawn into some aspect of the current controversy and investigations. Our experience suggests that, to prepare for such potential challenges to past and current business practices and to reestablish credibility in the marketplace and with regulators, these parties should consider the following:

An independent review of potential trouble areas to provide objective support for the essential integrity of the processes used in the past or to guide future efforts to identify potential remedial steps for operational and legal processes;

Participation by the audit committee or a special committee of the board of directors in order to provide appropriate board oversight and reassur-ance;

Developing a strategy to address the concerns of regulators, particularly where companies may be subject to the jurisdiction of more than one state or federal financial regulatory agency, including how to deal with potential concurrent civil and criminal investigations, cease and desist orders, civil money penalties and various forms of restitu-tion;

The dynamics of responding to multiple Attorneys General investigations and multi-faceted litigation and settlement processes, including shareholder and derivative suits;

The impact on and potential liability of or to busi-ness partners, service providers, counterparties, investors and others in the mortgage finance chain.

While the documentation deficiencies that have been alleged appear to be fixable, the aftermath of address-ing regulatory, investor and consumer concerns in order that the country can once again enjoy an efficient, effec-tive and reliable mortgage finance system will require more attention and thought. Success in that regard is likely to be the product of significant remedial and pro-active actions that rebuild confidence in institutions and processes.