TheMReport — News and strategies for the evolving mortgage marketplace.
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MONTH IN REVIEW Third-quarter statistics, surprising consumer conduct, and "Small Town, U.S.A." captured industry headlines this month. Network with the Valuation Thought Leaders Membership Benefits CRN FORUM: The CRN is a private email forum for members only. The purpose is for leadership within the valuation community to act as counsel to each other, share experiences, and assist each other in solving mutual problems. MEETINGS: Quarterly meetings are held across the United States with a specific agenda to return integrity to the appraisal profession. STRATEGY: Collaboration on building a road map for the future and effecting change. MEMBERS ACCESS: Private log in area on the site to access CRN Meeting presentations and CRN Membership Directory (updated yearly). www.collateralrisknetwork.com For more information contact JOIN TODAY Joan Trice at jtrice@allterragroup.com or 513.659.1656 14 | THE M REPORT October 17 Borrower Dishonesty Driving Fraud Findings Kroll Factual Data, Inc., found that risk related to mortgage applications is increasing. The company recently revealed that the loans it processes had a 1.3 percent increase in the possibil- ity of fraudulent activity in the second quarter compared with the previous quarter. "With rates at all-time lows, the volume of loan applications in the second quarter was extremely high, putting even greater pressure on mortgage lenders," said Rod Bazzani, president of Kroll Factual Data. Aside from the high volume of mortgage applications in today's low mortgage rate environment, the company pointed out that lenders are also dealing with more stringent lending requirements. October 16 HomeVestors Touts Investments in 'Small Town, U.S.A.' For real estate investors, it's time to head to "Small Town, U.S.A.," according to a new study from HomeVestors of America, Inc. Releasing findings from the company's Local Market Monitor (LMM), HomeVestors reported that smaller cities, those with populations between 200,000 and 500,000, are emerging markets for housing invest- ment opportunities. Ranking the nation's top 10 smaller markets based on their value for investors, HomeVestors' roster included Lafayette, Louisiana; Fort Wayne, Indiana; Erie, Pennsylvania; Corpus Christi, Texas; Houma, Louisiana; Fayetteville, Arkansas; Tyler, Texas; Longview, Texas; Lincoln, Nebraska; and Ann Arbor, Michigan October 15 Non-Distressed Prices Hit 20-Month High Non-distressed home prices hit a 20-month high in August, accord- ing to the latest Residential Price Index (RPI) from FNC, Inc. Home prices rose in August for the sixth consecutive month, increasing at a seasonally unadjusted rate of 0.3 percent from July. On a year- over-year basis, prices rose 1.5 percent from August 2011. Year- to-date, prices were up in August nearly 5 percent from January. While August's month-to-month increase is modest compared with the months prior, it still represents a peak since early 2011. FNC said the increase is "consistent with signs of strengthening market conditions that are led by rising existing-home sales and declining foreclosure activities." October 12 Citigroup Posts Decline in Third- Quarter Net Income Citigroup reported a net income of $468 million, or $0.15 per share, for the third quarter of 2012, down from $3.8 billion in the same quar- ter a year ago, and the company cited a pre-tax loss of $4.7 billion after the sale of Citi's remaining stake in Morgan Stanley Smith Barney (MSSB) as the catalyst for the decline. However, the financial institution's North American con- sumer banking revenues improved 6 percent from the previous year to $5.4 billion due to higher retail banking revenues, while higher mortgage revenues helped the bank see retail banking revenues increase 35 percent to $1.7 billion from the third quarter of 2011. October 10 A.M. Best Sees 'Encouraging Signs' for Title Insurers Citing "positive developments oc- curring in the housing market," rat- ings agency A.M. Best announced it is maintaining a stable ratings outlook for the title insurance industry. While insurers may have struggled a bit in 2011 as premi- ums fell to their lowest level in a decade, A.M. Best noted premiums increased 10 percent in the second quarter of 2012 compared with the same period in 2011. In addition, "underwriting performance has significantly improved through the second quarter of 2012, as losses from prior years have begun to moderate," the agency said. According to A.M. Best, 2011 saw net underwriting of $29 million, compared with $210 million in 2010.