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Fitch has negative outlook on title insurance industry

More layoffs expected to keep costs in line with falling revenue

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The nation's five biggest title insurers saw operating revenue from title operations fall 12 percent in 2007 and may experience another 20 percent drop this year, analysts at Fitch Ratings said in issuing their first-ever negative rating outlook for the industry as a whole. The negative rating outlook -- the first since Fitch began covering the industry in the early 1990s -- was prompted by expected declines in mortgage originations, and expectations that mounting losses will eat away at capital levels, analysts said. "If 2008 turns out as poorly as expected, the industry will have endured consecutive losing years which, in the context of historical results, is considered unusual," Fitch analyst Doug Pawlowski said during a briefing on the rating agency's special report on the title insurance industry. The report projected that title insurers will have to step up cost-cutting measures, including layoffs, to keep pace with falling revenues. The March 5 repor...