Last year may have been the worst since 2002 for title insurers, who will need to reduce costs and contain losses to firm up their bottom lines as premium volumes fall.

That’s according to a new report from Demotech Inc. analyzing the title industry’s third-quarter results. The quarterly update showed net income for the year down 25 percent at the end of the third quarter, and Demotech projects direct premiums written will total $14.5 billion for the year, the lowest level in five years.

Tighter lending standards are limiting the availability of low-rate mortgages to only the most qualified buyers, and larger down payments and higher credit scores are needed to purchase a new home, Demotech analysts said. Affordability remains an issue in many areas, and homeowners with little equity may not be able to refinance or sell if they are upside down on their current loan because of recent home-value declines.

“Until existing homeowners build enough equity to refinance and potential home buyers gain the financial strength to afford a new home, the demand for title insurance will be reduced,” Demotech said in announcing the release of the quarterly update. “A recession would exacerbate the situation. For the next year or so, title companies will need to focus on reducing costs and containing losses in order to achieve healthier bottom lines as premium volumes decline.”

The Mortgage Bankers Association recently projected that total mortgage originations will fall to $1.96 trillion in 2008, down from an estimated $2.34 trillion in 2007. Purchase-mortgage originations are expected fall 18 percent from 2007 levels, to $955 billion (see Inman News story).

Show Comments Hide Comments


Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription