2012 State of the industry

October Research has published there 2012 “State of the Industry”.  It is available for free at http://www.thetitlereport.com/TTR/IndustryReport2012.aspx .  It contains sections about:

Real Estate
Gradual housing recovery expected, but sleeper issues creeping up

Title Insurance
Distressed market to define title insurance business in 2012

Homebuilders in 2011: Bubble states hold down housing starts

Consumer confidence improves, but mortgage markets remain constricted

Appraisal industry battles continue into 2012

Settlement Services Law
Business-changing issues loom in 2012

RESPA in 2012: The evolution of a titan

The Dodd-Frank Act
Dodd-Frank in 2012: big issues, little certainty


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Continuing Ed for Title Agents

Fannie Mae Predicts ‘Moderate Growth’ in 2012

The U.S. economy is projected to grow 2.3 percent for the year, according to Fannie Mae’s Economics & Mortgage Market Analysis Group.

Growth will be affected by “fiscal policy issues and political economic uncertainty,” according to Fannie Mae.

The upcoming presidential election, the healthcare debate, and the sovereign debt crisis in the euro zone are three wild cards causing concern for Americans.

Recent improvements in employment have elevated consumers from their “summer rut,” and the housing market is showing some positive indicators, though movement is slow.

“We’re entering 2012 with decent momentum, especially on the employment side,” said Doug Duncan, Fannie Mae’s chief economist.

However, Duncan suggests this momentum will fade over the first half of this year amid “policy changes and challenges that involve the global economy, the domestic economy, and the housing sector.”

Duncan predicts “a year of moderate growth edging away from the 2011 threat of a double dip.”

via dsnews.com

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From ALTA Advocacy Update by Michelle Korsmo, ALTA CEO (1/17/12) | Property Records Education Partners (PREP)

Housing Policy & Data
Rates for 30-year fixed-rate conventional mortgages fell 2 basis points to a new record low of 3.89% last week.  The latest Beige Book from the Federal Reserve Banks continues to show a growing economic recovery led by consumer spending. However, the news was not all bright, as continued weakness in the housing market holds back a  robust economic recovery. In the latest round in the Federal Reserve’s push for a broader mortgage refinancing program, a new study from the Federal Reserve Bank of New York shows that the economic benefit of home-loan refinancing to consumers far exceeds the effect of lost returns to investors who provide the residential financing. In the paper, the New York Fed argues that government or foreign investor (who own about 47% of securities backed by residential mortgages) spending on U.S. goods and services doesn’t depend “to any significant degree” on the income from their bonds. Meanwhile, another 8.3% of MBS are held by insurance and pension funds whose spending would spread out over a long period of time. However for distressed homeowners, 50 cents of every dollar saved in a mortgage payment is recycled back through the economy as additional spending.

In December banks filed their lowest number of foreclosures since November 2007. Foreclosures were down 35% in 2011, due to  significant delays related to documentation and legal issues. However, these low numbers may only be temporary since there is a backlog of 3.5 million seriously delinquent mortgages. If banks get more aggressive on foreclosures, it could have a further dampening effect on home values. Analysts continue to get more bullish on home builders as evidence points to a resurgence in new construction in 2012. On Wednesday, Lennar Corp. reported that its fourth-quarter orders surged 20% from a year earlier, far surpassing analysts’ expectations. (Some analysts admitted they thought orders would decline.) Meanwhile, the latest National Association of Home Builders/First American Improving Markets Index shows that the number of areas showing improving market conditions jumped to 76 in January, up from 41 a month earlier. Could the market’s appetite for private label mortgage securities be returning? Redwood Trust Inc., the only company to issue so-called private label mortgage bonds since the housing market collapsed three years ago, sure hopes so as it prepares for its fourth such deal since 2008. The new issue of at least $405 million is larger than the two it sold in 2011. The market for privately issued residential mortgage-backed securities, which during the boom funded most of the U.S. housing market, has shrunk to $1.1 trillion outstanding from $2.4 trillion in 2007. Despite extremely stringent underwriting criteria (the mortgages have an average loan-to-value ratio of 62.8%, and average credit scores of 770), Redwood is adding large credit enhancements to warrant the necessary AAA rating.

via prepchapters.org

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