Florida Title Insurance: January 2012

Friday, January 20, 2012

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
Homebuilders in 2011: Bubble states hold down housing starts

Mortgage
Consumer confidence improves, but mortgage markets remain constricted

Appraisal
Appraisal industry battles continue into 2012

Settlement Services Law
Business-changing issues loom in 2012

RESPA
RESPA in 2012: The evolution of a titan

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

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Wednesday, January 18, 2012

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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U.S. stocks rise with builder sentiment - Market Snapshot - MarketWatch

NEW YORK (MarketWatch) — U.S. stocks rose Wednesday, sending the S&P 500 Index to a close above 1,300 for the first time since July 28, on improved sentiment in housing and as Goldman Sachs Group Inc.’s earnings beat expectations.

“We started off on a positive footing because certain financial earnings weren’t as bad as investors had feared, but most of the uptick came from home-builders’ confidence reaching a level not seen since 2007,” said Jack Ablin, chief investment officer at Harris Private Bank in Chicago.

Click to Play

Newmark: Curb your enthusiasm

Mean Street host Evan Newmark urges bankers and traders on Wall Street to lower their expectations when it comes to earnings and prosperity. (Photo: AP)

“Now we have two areas, jobs and housing, which are critical foundations, and both are seeing signs of improvement. Plus, the euro /quotes/zigman/4867933/sampled EURUSD +0.01% is back above $1.28 — if you’re going to use a barometer for progress in the EU, the euro is as good as any,” Ablin added.

The Dow Jones Industrial Average /quotes/zigman/627449 DJIA +0.78% rose 96.88 points, or 0.8%, to 12,578.95.

The S&P 500 /quotes/zigman/3870025 SPX +1.11% added 14.37 points, or 1.1%, to 1,308.04, with the technology sector, and chip manufacturers in particular, gaining after circuit maker Linear Technology Corp. /quotes/zigman/74810/quotes/nls/lltc LLTC -0.06% said it expects revenue to rise as much as 8% in its third quarter. Read more on Linear Tech’s results leading rally in chip stocks.

Web portal Yahoo Inc. /quotes/zigman/59898/quotes/nls/yhoo YHOO -0.38% 3.2% rose on news that co-founder Jerry Yang is severing all ties to the company he co-founded. Read more about Yahoo.

Microsoft Corp. /quotes/zigman/20493/quotes/nls/msft MSFT +0.32% , International Business Machines Corp. /quotes/zigman/230066/quotes/nls/ibm IBM +0.59% , Intel Corp. /quotes/zigman/20392/quotes/nls/intc INTC +0.12% and General Electric Co. /quotes/zigman/227468/quotes/nls/ge GE +0.05% are among the heavyweights still on tap to report this week, and results from any “could give the market a lift or dampen it,” according to Fred Dickson, chief investment strategist at Davidson Cos. in Lake Oswego, Ore.

The Nasdaq Composite Index /quotes/zigman/123127 COMP +1.53% climbed 41.63 points, or 1.5%, to 2,769.71.

For every stock losing ground about four gained, with less than 800 million shares trading hands on the New York Stock Exchange. NYSE composite volume was about 4 billion.

Building blocks

Investor sentiment and the euro /quotes/zigman/4867933/sampled EURUSD +0.01% were bolstered by reports the Greek government might reach a deal with its private creditors over a debt swap in coming days. Also, the International Monetary Fund is proposing hiking its lending capability by as much as $500 billion. Read more on the IMF and also read WSJ article on Greek debt talks resuming.

Goldman Sachs /quotes/zigman/188479/quotes/nls/gs GS +0.18% shares jumped 6.8% after the investment bank reported results that beat Wall Street’s expectations, while Bank of New York Mellon Corp. /quotes/zigman/445224/quotes/nls/bk BK -0.05% shares slid after its earnings fell 26% Read analysis of Goldman earnings.

“Goldman Sachs broke a trend” of earnings disappointments from the banking sector, said Dickson.

Stock-index futures had retained modest gains after the government reported wholesale prices unexpectedly fell last month, data supportive of the Federal Reserve’s benign view on inflation. Read more on wholesale prices.

A measure of builder confidence in the housing sector rose for a fourth consecutive month in January to hit its highest level since mid-2007, with builder-related shares including PulteGroup Inc. /quotes/zigman/129784/quotes/nls/phm PHM -0.38% and Lennar Corp. /quotes/zigman/232035/quotes/nls/len LEN +0.22% advancing more than 4%. Read more on home builders.

Separately, figures from the Federal Reserve had U.S. industrial production rebounding last month, climbing 0.4% after a revised 0.3% drop in November. Read more on industrial output.

“Investors are weighing a combination of some reasonable economic data, and data we saw from overseas looked OK, so no bad European news,” remarked Davidson’s Dickson.

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