al-Qaeda, Amsterdam, Christmas Day, Detroit, Nigeria, Northwest Airlines, terrorism, travel, Yemen

Nigerian man allegedly confesses to botched terrorist attack on Northwest flight

Reports say that Abdul Mudallad, a Nigerian citizen, flying from Nigeria to the United States through Amsterdam, allegedly confessed to authorities that his attempt to blow up the Northwest airlines flight was on orders given to him by al-Qaeda.

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commercial real estate, mortgage lender, mortgage title insurance, residential real estate, settlement services, title insurance

A Look Back At The Year That Was In Title

The following article, prepared by A.M. Best, gives an assessment of the state of the Title Insurance industry in 2009. The general view is that headwinds will exist in 2010, but that the pricing environment may improve, and the payout to agents may decline.
“While the title industry’s premium volume and profitability deteriorated significantly in 2008, trends have been improving modestly in the second half of 2009. The housing market has begun to revive, and home sales also have been increasing slightly. The federal government’s greater involvement in the mortgage market, the favorable tax treatment of new home purchases, and the continued low mortgage interest rates have aided the housing market, as well. However, the title industry still faces headwinds as future revenue and profitability trends will be significantly impacted by high unemployment, continued significant home foreclosure activity and the uncertain direction of home prices.
During the housing bubble in the first half of the decade, the industry’s revenue more than doubled. But just as the number of real estate transactions drove up title insurance revenue—along with a greater incidence of title claims—the housing market downturn resulted in a significant paring back of revenue and negatively trending profitability measures in 2008. The upward trend in the rate of defaults and foreclosures, which began in the subprime mortgage segment in 2007, spread to other areas of the mortgage market in the form of greater delinquencies and rates of foreclosure in the “Alt-A” and even to “prime” mortgage segments.
Title insurers, like insurers in many sectors of insurance, have not been immune to failure. A.M. Best Co.’s annual study of insurance impairments includes at least 18 title insurers that have become impaired or insolvent. In 2008, four title companies were identified as impaired, according to A.M. Best’s special report, “U.S. Property/Casualty – 1969-2008 Impairment Review: Real Estate’s Title Insurers Lead 2008 P/C Financial Impairment.”
Loss experience in 2008 and 2007 deteriorated noticeably, partly as a result of inadequate reserving for future claims during the period of the housing boom of 2000-2006. The end of the housing boom and the subsequent rapid increase in defaults and foreclosures has led to significantly greater incidence of title claims arising out of those calendar years.
The title industry is highly dependent on real estate markets, which, in turn, are highly sensitive to mortgage interest rates and overall economic well-being. Typically, there is an inverse relationship between changes in mortgage interest rates and real estate activity, and hence, operating revenue for title insurers.
As interest rates fall, real estate transactions generally increase and title insurers’ operating revenues generally rise, reflecting the greater demand for title products. The reverse occurs when interest rates rise. Changes in mortgage interest rates create corresponding fluctuations in title insurers’ total operating revenue and pretax operating gains.
While the real estate market has slowed down significantly in recent years, the mortgage interest rate environment has continued to be favorable. The 2009 30-year fixed-rate mortgage yield as of September 2009 has decreased 92 basis points from the yield as of year-end 2008, which had declined by 22 basis points when compared to the yield as of year-end 2007. This favorable interest rate environment has helped to stabilize overall housing market activity and has is not as significant as the unprecedented refinance boom of 2003.
Incurred losses also have been rising due to inadequate loss reserving practices earlier in the decade when transaction volume was increasing dramatically. The industry’s composite ratio increased by approximately 10 points to 109.0% (from 99.5% in 2007). This resulted from an increase in the loss and loss adjustment incurred ratio (up three points) and a sharply higher expense ratio (more than six points) due to the rapid decline in premium volume.
Title insurance policies have no set termination date and no limitation on filing claims. However, the only fees collected are the one-time charges when the policy is issued. Thus, losses reported in any one year will affect that year’s profitability for statutory accounting purposes but are not generated by that year’s business activity.”

bankruptcy, deed in lieu, forbearance agreement, foreclosure, hallmark abstract service, mortgage lender, mortgage modification, real estate, refinance, short sale

Potential Remedies To Foreclosure

There are few developments more devastating than the prospect of losing your home. The fact of the matter is that under certain circumstances foreclosure can potentially be averted, and the home retained. The list below offers some of those options that can be explored. As in any financial decision, an advisor that you can trust completely should be consulted, and a firm that comes highly recommended with a proven track record should be utilized for any transaction.

A reinstatement is the simplest solution for a foreclosure, however it is often the most difficult. The homeowner simply requests the total amount owed to the mortgage company to date and pays it. This solution does not require the lender’s approval and will ‘reinstate’ a mortgage up to the day before the final foreclosure sale.

  • Benefit: Does not require the mortgage company or lender’s approval.
  • Drawback: Requires that a homeowner be able to pay all back payments, fines and fees.

Forbearance or Repayment Plan
A forbearance or repayment plan involves the homeowner negotiating with the mortgage company to allow them to repay back payments over a period of time. The homeowner typically makes their current mortgage payment in addition to a portion of the back payments they owe.

  • Benefit: Allows the homeowner to make back payments over time.
  • Drawback: Requires that a homeowner be in a financial position to pay not only their current mortgage, but also a portion of the back payments owed. Some mortgage companies will require a homeowner to ‘qualify’ for forbearance.

Mortgage Modification
A mortgage modification involves the reduction of one of the following: the interest rate on the loan, the principal balance of the loan, the term of the loan, or any combination of these. These typically result in a lower payment to the homeowner and a more affordable mortgage.

  • Benefit: Reduces the payment a homeowner is required to make on a monthly basis and may reduce the principal balance of the loan
  • Drawback: Requires that a homeowner ‘qualify’ for the new payment and will often require full documentation. Lender has to be actively pursuing modifications.

Rent the Property
A homeowner who has a mortgage payment low enough that market rent will allow it to be paid, is able to convert their property to a rental and use the rental income to pay the mortgage.

  • Benefit: Allows homeowner to keep property indefinitely.
  • Drawback: The issues that can arise with a rental property are many, and rent often does not cover the full cost of property ownership and maintenance.

Deed in Lieu of Foreclosure
Also known as a ‘friendly foreclosure’, a deed in lieu allows the homeowner to return the property to the lender rather than go through the foreclosure process. Lender approval is required for this option, and the homeowner must also vacate the property.

  • Benefit: Many times in a successful deed in lieu, the lender will forego their right to a deficiency judgment.
  • Drawback: Requires that a homeowner vacate the property, and a deed in lieu may be reported to credit bureaus as a foreclosure.

Many have considered and marketed bankruptcy as a ‘foreclosure solution,’ but this is only true in some states and situations. If the homeowner has non-mortgage debts that cause a shortfall of paying their mortgage payments and a personal bankruptcy will eliminate these debts, this may be a viable solution.

  • Benefit: Does not require lender approval.
  • Drawback: If a homeowner cannot afford their mortgage payment, a bankruptcy will only stall—not stop—the foreclosure process. Bankruptcy can be costly, is damaging to credit scores, and can only be declared once every seven years.

If a homeowner has sufficient equity in their property and their credit is still in good standing, they may be able to refinance their mortgage.

  • Benefit: In some cases, this will lower payments.
  • Drawback: In today’s market, a refinance will almost always raise mortgage payments, and is an expensive process.

Servicemembers Civil Relief Act (military personnel only)
If a member of the military is experiencing financial distress due to deployment, and that person can show that their debt was entered into prior to deployment, they may qualify for relief under the Servicemembers Civil Relief Act. The American Bar Association has a network of attorneys that will work with servicemembers in relation to qualifying for this relief.

  • Benefit: If qualified, this will lower payments on all consumer debt in addition to mortgage payments.
  • Drawback: Must be active military to qualify.

Sell the Property
Homeowners with sufficient equity can list their property with a qualified agent that understands the foreclosure process in their area.

  • Benefit: Allows homeowner to avoid foreclosure and harvest some of their equity.
  • Drawback: In many cases today, homeowners do not have sufficient equity to sell their property without negotiating a short sale (see next solution).

Short Sale
If a homeowner owes more on their property than it is currently worth, then they can hire a qualified real estate agent to market and sell their property through the negotiation of a short sale with their lender. This typically requires the property to be on the market and the homeowner must have a financial hardship to qualify. Hardship can be simply defined as a material change in the financial stability of the homeowner between the date of the home purchase and the date of the short sale negotiation. Acceptable hardships include but are not limited to: mortgage payment increase, job loss, divorce, excessive debt, forced or unplanned relocation, and more.

  • Benefit: A short sale allows the homeowner to avoid foreclosure and salvage some of their credit rating. This also keeps foreclosure off the individual’s public record, and in many cases will allow the homeowner to avoid a deficiency judgment. Borrower may qualify for another mortgage in as little as 24 months (as opposed to five years for a foreclosure).
  • Drawback: Short sales can be a trying process in which a homeowner is best served by contracting with a qualified real estate agent to guide the way.
(Information courtesy of Short Sale Minnesota)
Assemblyman Richard Brodsky, hallmark abstract, mortgage title insurance, NYSLTA, public option, settlement services, title insurance

Does Title Need A Public Option?

The following is a letter regarding proposed legislation to bring a “public option” to title insurance, similar to that proposed in healthcare. If you do not agree with it, let your representatives know.

November 30, 2009
Dear members,
As you may know, Assemblyman Richard Brodsky (D-Westchester), has introduced legislation to create a “public option” for title insurance. He is convinced that this will lead to reduced premiums and provide funding for affordable housing, state roads and bridges and property tax relief. Needless to say, that as absurd as this may sound, it is very much a concern to everyone who makes their living in the title industry. The NYSLTA is working closely with our lobbyists as well as with ALTA in squashing this before it begins to gain any momentum – which is why I am writing to you.
Attached you will find a letter drafted by Bill Collins from our Executive Committee. We are asking every underwriter, every agent, and every municipal company to forward a copy of this letter to each one of their employees. Please be sure that it gets to the independent examiners and closers and anyone else who is involved in our business. Ask them to send a copy of this letter or a letter of their own to their local legislator. On the NYSLTA’s website ( under the “Legislation” tab you can access a link that will allow you to search your legislator by zip code. I suggest that you make it your responsibility to get these letters out. Make the copies yourself. Hand them out personally and then collect them later in the day. Stamp them and put them with the other “outgoing mail”.
I cannot stress how important this is. Actually, this is more than important – this is imperative. This is something that must be done and must be done right now. I trust you will act on this without delay.
Thank you,
John Piccirillo
New York State Land Title Association, Inc.