When will the Foreclosure write offs Turn Critical

[loosecannon]

The title insurance mess is becoming a bigger player in foreclosuregate. All told at least one GDP reduction in asset values is going to be spawned by this mess. And by the way Thornberg Mortgage not Bear Sterns was the first shoe to drop.

I think it was Madeline who pointed out that flimsy title insurance firms are far too undercapitalized to handle a shake up.

Do they reinsure, and if so how is the exposure spread?

 

[william the wie]

The title insurance mess is becoming a bigger player in foreclosuregate. All told at least one GDP reduction in asset values is going to be spawned by this mess. And by the way Thornberg Mortgage not Bear Sterns was the first shoe to drop.

I think it was Madeline who pointed out that flimsy title insurance firms are far too undercapitalized to handle a shake up.

Do they reinsure, and if so how is the exposure spread?

Reinsurance is not part of my circle of competence. If an insurance genius like Buffet can lose his ass in reinsurance as he did with Gen-re I ain't touching that question with a fork on the end of a barge pole.

 

[georgephillip]

When the Republicans resume control of congress...

"Republicans, however, have been largely silent on the (foreclosure fraud) issue. And according to Rep. Darrell Issa (R-CA), who is slated to take over the House Committee on Government and Oversight should the Republicans gain a majority, the GOP is not really interested in the banks’ malpractice.

"Instead, Issa wants to 'launch aggressive inquiries' into whether the government helped poor people buy houses they couldn’t afford:

"The conservative Republican from California, who would become chairman of the powerful House oversight and government reform committee, said hearings would focus on whether the federal government should be involved at all in sponsoring home loans for the poor."

Rather Than Investigating...

Issa has an interesting background, to say the least.

According to his critics he's made a fortune manufacturing car alarms in China after once being arrested on suspicion of GTA along with his brother who has been convicted for the same crime.

Assuming shills like Issa take over, wouldn't it be useful to have 100 - 200 Greens and Libs in the next House of Representatives?

 

[loosecannon]

"the GOP is not really interested in the banks’ malpractice.

"Instead, Issa wants to 'launch aggressive inquiries' into whether the government helped poor people buy houses they couldn’t afford:"

Partisan dickheads who can't be trusted with public office. There is no hope for this nation, we are far too corrupt to save.

 

[loosecannon]

The title insurance mess is becoming a bigger player in foreclosuregate. All told at least one GDP reduction in asset values is going to be spawned by this mess. And by the way Thornberg Mortgage not Bear Sterns was the first shoe to drop.

I think it was Madeline who pointed out that flimsy title insurance firms are far too undercapitalized to handle a shake up.

Do they reinsure, and if so how is the exposure spread?

Reinsurance is not part of my circle of competence. If an insurance genius like Buffet can lose his ass in reinsurance as he did with Gen-re I ain't touching that question with a fork on the end of a barge pole.

Reinsurance is actually really simple if you discount the complexity of developing actuarials and guaging risk exposure.

The reinsurance industry IS the insurance industry while what we call the insurance industry is actually the marketing arm of the industry. In every case I am aware of insurance companies "sell" insurance and then contract with reinsurance firms to actually cover liabilities if/when they occur. They purchase reinsurance from a number of firms, all of which provide reinsurance to a number of client insurance companies. So risks have been dispersed broadly by the time reinsurance is acquired for a tranch of policies.

Reinsurance makes money when catastrophic events do not occur and gets free use of large reservoirs of other people's money, which is how Buffet launched his empire. But when catastrophic events occur, like Katrina or a massive recession they lose money and have to have deep pockets to cover their "margins".

It seems probable that states would require title insurance firms to have reinsurance to avoid a local catastrophe from overwhelming their ability to cover claims.

But I have never heard of such an event impacting title insurance before.

If they have reinsurance shit will roll downhill onto guys like Buffet. If they don't then they will go belly up quickly if shit starts to roll.

 

[william the wie]

That's the critical problem LC, title insurance is all about depth of knowledge of local titles. Here in Jacksonville the questions are what French and Spanish land titles from the 1500s might have living, unknown and valid heirs.

 

[loosecannon]

That's the critical problem LC, title insurance is all about depth of knowledge of local titles. Here in Jacksonville the questions are what French and Spanish land titles from the 1500s might have living, unknown and valid heirs.

well that is a whole other element. Fraud is not new, and documents were much easier to forge centuries ago. That aside title insurance is just insurance, but a form of which is generally so low risk that I wonder if they re-insure at all.

In any case they didn't charge enough.

 

[william the wie]

That's the critical problem LC, title insurance is all about depth of knowledge of local titles. Here in Jacksonville the questions are what French and Spanish land titles from the 1500s might have living, unknown and valid heirs.

well that is a whole other element. Fraud is not new, and documents were much easier to forge centuries ago. That aside title insurance is just insurance, but a form of which is generally so low risk that I wonder if they re-insure at all.

In any case they didn't charge enough.

Quite true and title insurance will be expensive relative to housing prices for a very long time to come.

 

[william the wie]

No real news in this post but counties and states are short of money and empty houses depress tax revenues therefore a lot of trial balloons are being floated on how to use foreclosures to balance state budgets among the ones I have heard of are:

$25K fines for sloppy foreclosure paperwork.

1K/day for non-maintenance of REO properties.

A lower tax for boarded up windows and a slightly higher tax for windows that are not boarded up.

Raising both taxes and/or creating homestead/occupied rental exemptions.

The tax liens should permit a great deal of local revenue when the foreclosures end up of the courthouse steps.

Tax authorities are smelling a cash cow for everywhere but the large money centers.