I’m sorry I haven’t been posting but there really hasn’t been much I wanted to say that would add value to your conversation here at Lenderama.
Anywho, I’m back with two messages.
First, I find the LandAmerica situation scary and fascinating. The 1031 Exchange program was surprisingly vulnerable. The strength of the title insurance reserves was refreshingly solid. Policy holders are safe. I am rooting for approval for the Fidelity bid and was happy when Fidelity set up reinsurance covering new business. We also write for Old Republic and so have backup, if needed.
Big news isn’t over in title but we’re pretty near the end of the cycle which follows the tail of mortgage lending.
Second, I’m just plain sick and tired of negativity and the media. I am convinced that we have cycled through most of what needed to flush out of real estate and mortgage lending and we are where we should be, the first to cycle out of trouble. Real estate always leads the cycle. The natural force of that economic reality would probably be gushing now if not for the fear peddlers. As it is, I still see it as a force that can’t be stopped and am just awaiting that crack in the emotional dam.
So, until then, be well, be merry and count your blessings. I am.
Diane, for one of the first times I think I disagree with you! I think a merger involving Land America will be a disaster for consumers and independent title companies. This merger will place mega brokers and their affiliated title companies under the same umbrella as the independent title companies. And guess who will have more clout when it comes to influencing underwriter decisions?
Do you think FidelAmerica will hesitate for a moment if their mega brokers ask them to terminate an independent agent they don’t like? Or how about those file and use states where the independents have negotiated hard to have Fidelity bring in a lower priced underwriter? How long will it be before FidelAmerica bows to the pressures from their high volume mega brokers and terminate that low priced underwriter leaving the independent with few alternatives?
Land America was the company that threatened Erin Toll of the Colorado Insurance Commioner’s Office. Remember that one? In a taped phone conversation Land America threatened to release damaging information about Ms. Toll if she didn’t cease her investigation into Land America. That made it into a Congressional Staff Report… Can you imagine having those same people under the umbrella of FidelAmerica?
Diane, its refreshing to disagree with you. You’re still my favorite poster.
Doug MIller
LOL Favorite poster…that makes me think of Betty Grable. There better not be any crazy Radical posters out there, well maybe dart boards, that I can understand.
Hmmm…I’m not catching your drift, Doug. In PA, both Fidelity and LandAm have huge ABAs and independents. I don’t see this as an issue.
Frankly, facing the failure of an underwriter, my ONLY concern is for policyholders. As long as they land safely and I do trust the regulatory system to make that happen, I don’t care where LandAm ends up.
The threat to Erin Toll was a dolt moment for the brainiac who spoke the words and I am certain that all parties are beyond that now.
Hey, sorry I didn’t make the OAITA meeting in the ‘Burgh. Hear it was good.
In Minnesota Edina and Burnet Realty use LandAmerica (Lawyers) which account for a large majority of real estate transactions. They will quickly become FidelAmerica’s largest customers. Fidelity has few ABa’s that I’m aware of here.
Mega broker remittance dollars speak a lot louder than a bunch of independents’ and their words will likely not speak kindly about their competition that actually does compete on service and price. I believe that mega brokers will use this opportunity to attempt to remove the last bit of competition left in the title industry.
Take a look at page 25 of the following Congressional Staff Report where Land America’s Peter Kolbe uses language that sure sounds like extortion:
(Link to Congresional Staff Report is in next comment. For some reason I can’t get it to paste here)
When you read the e-mails and other correspondance of Senior Management at Land America (in the report) it is really hard to think that this was just a passing moment. If Senior Management of a gigantic firm like LandAmerica can conspire to commit extortion on the top regulator for Colorado, then I’m guessing that their future conduct at FidelAmerica can also be suspect.
Let me try that link to the Congressional Staff Report again:
http://www.condell.com/pdf/CO-106%20LFG%20House%20Fin%20Svcs%20Dec%202006.pdf
Afraid I’m going to have to disagree about media negativity. Unless the Financials improve, Real Estate isn’t going to go up, and since Wall Street is on a one-way trip to nowhere, I don’t see real estate improving for at least a year. So media negativity isn’t actually that bad a thing. Its keeping things realistic. Last thing we want now is another bubble which falls apart in 6 months.
Agreed.
I would love to start a new thread, but can’t figure out how… But along your lines of thinking of a future real estate bubble, have you given much thought to how to prevent it?
Consider bifurcating residential real estate into two categories, the safeguard industries and the brokering industries. The safeguard industries of appraisal, home inspection, title and legal are supposed to uncover problems with the transaction and the brokerage industries are more outcome (commission) based to get the job done.
Currently we allow the brokerage industries which receive outcome based compensation to select (or “recommend”) the safeguard industry providers. I’ve interviewed people from each of the safeguard industries and so far have found that all of them are afraid to provide info that might jeapordize the commission of the referror and feel that to do so would result in a boycott.
How can we try and fix the real estate industry without finding a way to completely separate the safeguard industries so that they can do their job without fear of a boycott? Why bother having the safeguard providers if we’re not going to allow them to do their jobs? How do we get commission based providers out of the business of “recommending” safeguard service providers?
Look, we bubble up and blow about every twenty years or so in real estate. Lessons learned are forgotten by the young who always believe they know a better way. It’s a natural cycle and real estate always lead out of any cyclical downturn. Our downturns start before everyone else and our upturns start before everyone else. Expect real estate to start recovery soon and over the next year or so everyone else will follow.
Now LandAm has a new suitor–Stewart is also entering the arena. This transaction won’t be over until it’s over.
We’ll know the end to the FNF / LFG saga before Christmas. The most recent purchase agreement gives FNF the right to terminate the deal if not closed by 12/22.
I have to agree with Doug, that the merger could have a negative impact for the industry and consumers. Fidelity is the last of the major UW that seems to still on the right side of the ethical divide.
If you haven’t noticed the divide its simple – on one side is the “we’ll do anything for a near term result” crowd. At the settlement table they are the “deal must close, no matter what” participants. In the boardroom they are the “quarterly results above all else” leaders. Both variants have not only gained a foothold in real estate, but in some locales they have taken over.
The opposing side of the chasm is occupied by the “we need to do the right thing by the consumer and the industry, no matter what.” These are the people and organizations that refuse to inflate appraisals, overlook defects, deceive consumers, or look the other way when impropriety occurs. They are a constant thorn in the side of the “near term” crowd. They kill deals, they protect consumers, and they are concerned about their reputations and those of the industry. As their adversaries gain ground, their number is rapidly decreasing – shut out, run out or leaving in disgust.
If, as Doug suspects, Fidelity succumbs to the siren song of near term results the industry will continue its slide into the ethical abyss. Consumers, and eventually the entire industry will suffer.
I hope not.
Western PA must be different from other spots. All of the underwriters pretty much walked the same path.
That said, everybody knows what went down. Regulators will do what they must and now this is about getting back in the saddle again and moving forward.
It’s over, lets move forward. Well, that’s what I’m doing anyway.
I agree about the media. One of two things are happening: either the media heads are ignorant but need to keep the content coming – or they know exactly what they are doing but choose present in a way that gets ratings. Fear sells!
That’s right. Fear sells and it stinks.
We live in one of the most prosperous and safe periods of human history. Our biggest problem seems to be losing weight.
Media and government creating and feeding the fires of fear keep people under their control. Time for freedom, folks.
The job for mortgage lenders and we title people is to help consumers and others in our industry calm down and realize it ain’t that bad. It’s absolutely the best time to refinance or buy. This is an opportunity and consumers who keep their head about them are making out big time.
Diane, did you see what the new girl Jana posted about you?
the email from hell
I agree with you Diane , now is the best time to refinance or buy.
Greetings from Spain.
LOL Favorite poster…that makes me think of Betty Grable. There better not be any crazy Radical posters out there, well maybe dart boards, that I can understand.
Hmmm…I'm not catching your drift, Doug. In PA, both Fidelity and LandAm have huge ABAs and independents. I don't see this as an issue.
Frankly, facing the failure of an underwriter, my ONLY concern is for policyholders. As long as they land safely and I do trust the regulatory system to make that happen, I don't care where LandAm ends up.
The threat to Erin Toll was a dolt moment for the brainiac who spoke the words and I am certain that all parties are beyond that now.
Hey, sorry I didn't make the OAITA meeting in the 'Burgh. Hear it was good.