Articles from The Massachusetts Focus
Newsletter of Stewart Title Guaranty Company, Massachusetts Offices
Spring 2005, Volume 4, Number 2
by Thomas M. Flynn, Vice President and New England Division Manager
Title Insurance Industry Faces Probe for Alleged Kickbacks in Reinsurance Scheme
The Colorado and California Divisions of Insurance are currently conducting investigations into title companies and title agents who participate in potentially illegal captive reinsurance agreements. These arrangements allege that title companies are paying kickbacks to homebuilders, real estate agents and lenders, in exchange for guaranteed title business. According to the probes in Colorado and California, builders are allegedly directing homebuyers to title insurance companies that are splitting part of their fees with the builders via captive reinsurance arrangements. There are indications that this probe may lead to the scrutiny of ABAs (affiliated business arrangements) and the PMI (private mortgage insurance) industry. Stay tuned.
Home Sales in 2005 Expected to Maintain Record Numbers
Sales for both new and existing homes according to the National Association of Realtors will remain historically strong for this year. Existing home sales are expected to decline by 3.2 percent for 2005 from a record $6.78 million last year. New home sales are expected to drop by 5.9 percent from a record 1.20 million units in 2004. The pace of price appreciation should ease in 2005. The national median existing-home price for all housing types should grow by 5.9 percent and the median new-home price is expected to rise 3.9 percent in 2005. Appreciation last year was 9.3 percent for all existing homes and 12.6 percent for new homes.
Stewart Reports Earnings for the Year 2004
Stewart Information Services Corporation (NYSE-STC) reported results for year-end 2004. Revenues for the year 2004 were $3.2 billion, a decrease of 2.5 percent compared to 2003. Net earnings for the year 2004 were $82.5 million compared to net earnings of 123.8 million in the previous year.