News

Following two quarters of increasing operating results, the title industry met with $18.9 million in losses in the third quarter, according to the 2012 edition of Demotech Performance of Title Insurance, released in December. Also, in December Fitch Ratings Agency revised its outlook on the title insurance industry from negative to stable. ""Fitch anticipates the industry will remain profitable in 2012 despite top-line pressures,"" Fitch wrote in a recent release.

Moody's Analytics' chief economist Mark Zandi has lowered his expectations for the growth of the U.S. economy into 2012. He says GDP will grow 2.6 percent next year and unemployment will likely remain high. Zandi and his colleagues at Moody's expect the U.S. economy to perform a bit better in 2012, but they say the outcome will depend on policy decisions coming out of both Europe and Washington.

With a New Year comes new challenges for our industry - and the promise of a better tomorrow. For homeowners. For our economy. For our nation. As it does for many Americans, a New Year offers the mortgage lending and servicing industry a chance to take a step back and reflect. The message we should take from 2011 is clear: The American Dream of homeownership is far from over. Americans want to own their slice of the dream, and one nightmare - namely, a financial crisis - will do anything but soften the strength and ingenuity of a time-tested people.

Home prices are expected to post a decline of 1.57 percent for the fourth quarter of 2011, after falling 0.4 percent through September, according to more than 100 economists and housing experts surveyed by Zillow. Prices are forecast to decline until the market's bottom is reached in late 2012 or early 2013. After 2013, panelists expect a steady annual appreciation rate of roughly 3 percent through 2016, which is slightly below appreciation rates experienced during the pre-bubble years.

While the euro-zone crisis continues to depress the economic outlook here stateside, the U.S. economy is growing and we will see a decent close to a tough year, according to Fannie Mae. The GSE says the fourth quarter will end with more than 2.5 percent economic growth, making it the best-performing quarter in 2011. Fannie Mae's report also mentioned ""slight improvements in housing."" However, the GSE predicts the positive momentum will slow as we move into the new year.

The year 2011 is ending on a high note as economists anticipate some positive movement in the housing market. Prices appear to be reaching their trough, visible supply is on the decline, and banks are beginning just slightly to loosen lending standards, according to a fourth-quarter report from Capital Economics. However, the research firm warns these positive signs do not point to an immediate recovery, particularly with housing undervalued by the most it's been since at least 1975.

Unemployment and other economic difficulties have caused millions of homeowners to involuntarily default on their mortgages, but there are some borrowers who are induced to simply stop making payments because their property value has fallen and they owe more than their home is worth. According to a study commissioned by the Mortgage Bankers Association, oftentimes strategic defaulters are encouraged to walk away at the behest of so-called mavens, or prominent influencers within their social networks.

Home prices in the U.S. decreased 0.2 percent on a seasonally adjusted basis in October, according to the Federal Housing Finance Agency's (FHFA) House Price Index released Thursday. On a yearly basis, prices were down 2.8 percent. The drop brings prices to levels seen in February 2004. Current prices are about 19.2 percent below their peak in April 2007. FHFA also revised the previous month's index, lowering the 0.9 percent increase reported for September to a 0.4 percent increase.

As 2011 comes to a close, Zillow anticipates home value declines for the year will total more than $681 billion. The rate of depreciation, however, is slowing, the company says. This year's decline is 35 percent less than last year's $1.1 trillion drop in value. Additionally, much of this year's decline occurred during the first half of the year. In terms of dollar value, the sharpest decline in 2011 was seen in the Los Angeles metropolitan area, followed by New York and Chicago.

Fannie Mae has updated its Selling Guide to reflect the recently announced changes to the Home Affordable Refinance Program (HARP). Most of the revisions were previously disclosed in November, but there's one nuance that stands out. Fannie Mae has removed the ""reasonable ability to repay"" clause from the criteria for vetting borrowers for a new HARP loan. Analysts say the subjective ability-to-pay requirement was one of the significant hurdles to HARP refinancing.