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MAJOR SERVICERS REPORT IMPLEMENTING 320 SERVICING STANDARDS RATINGS AGENCY SEES 'ENCOURAGING SIGNS' FOR TITLE INSURERS had 180 days to implement the 320 servicing standards outlined in the settlement reached with the U.S. Department of Justice and 49 state attorneys general. The standards address areas such as borrower The nation's five largest mortgage servicers communication, single point of contact, training for loss mitigation staff, and document execution related to foreclosure actions. As described by the attorneys generals' significant step forward in our ongoing efforts to restore confidence in the mortgage servicing industry" and commended Wells Fargo's more than 1,000 team members who worked to put the new standards in place. According to spokeswoman Susan She characterized the initiative as "another own executive committee that spearheaded negotiations for the states, the banks must "accomplish a massive undertaking" to put all the servicing standards into practice and achieve the "major reforms" ordered under the agreement. Their 180-day countdown began when a federal judge made the settlement official April 5. As of October 2, the five banks subject to the national settlement—Ally, Bank of America, Citi, JPMorgan Chase, and Wells Fargo—were required to be in full compliance with the agreement's servicing standards. Amy Bonitatibus, a spokeswoman for JPMorgan Chase, told DS News last month, "We met all the 320 servicing standards as outlined in the national mortgage settlement." She described it as "an enormous effort," the housing market," ratings 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 premiums fell to their lowest level in a decade, A.M. Best noted premiums increased 10 percent in the second quarter of 2012 compared to 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 Citing "positive developments occurring in Fitzpatrick, Ally's GMAC Mortgage unit "is working closely with the Office of Mortgage Settlement Oversight to ensure compliance with all aspects of the settlement." Fitzpatrick noted that compliance is "subject to internal and external independent validation." Joseph A. Smith, Jr. the designated underwriting of $29 million, compared to $210 million in 2010. However, investment income increased from $170 million to $336 million in the same period, leading to positive operating income of $308 million for the 2011 calendar year. The agency said a slowdown in the housing settlement monitor charged with ensuring all the banks comply with the terms of the agreement, issued a statement acknowledging the October 2 deadline for standards adoption. "As of today, the five banks subject to the settlement are required to operate in full compliance with its servicing standards," Smith said. "I will conduct careful and thorough reviews of the banks' processes to assure and verify that they are compliant with the settlement's rules." In assessing how well the servicers are noting that "the standards cover all aspects of the servicing business, [including] single point of contact, customer service, loss mitigation, anti- blight, and tenants' rights." Jumana Bauwens, spokeswoman for Bank of America, said her organization also "met all servicing standards requirements on time and will meet remaining requirements under the settlement." Mark Rodgers with Citi said his company' gage servicing department is also in compliance. Vickee Adams, a communications VP for market after the crash may have actually been helpful in getting the title industry back on steadier legs. "The majority of the losses in 2010 were driven by policies written at much higher policy limits during the housing boom in the mid 2000s," wrote analysts Michael Russo and Neil DasGupta. "During that time, real estate prices and transaction volume [were] much higher, resulting in a higher likelihood of errors and fraud." The ongoing housing recovery also s mort- Wells Fargo, said, "[A]s of October 2, Wells Fargo has implemented all of the 320 servicing standards required under the national mortgage settlement." 14 adhering to the servicing standards, the settlement directs Smith to use a series of 29 defined metrics associated with such offenses as erroneous foreclosure sales, wrongful mod denials, and fraudulent affidavits. Smith plans to evaluate the third-quarter and fourth-quarter performance of each servicer against all 29 metrics beginning in the first quarter of 2013. "While my team and I will work to review contributed to the agency's stable outlook. A.M. Best pointed to increases in home prices and sales as foreclosure rates fall as positive indicators. In addition, refinances spurred by low mortgage rates have led to a pickup in title orders. However, the slow rate of economic growth and the shaky global economic picture have made the agency cautious. According to Russo and DasGupta, the title industry has managed to endure the last few years by cutting expenses, a strategy the analysts say insurers will have to continue using in the near term. "Sustaining the improved operating trends the banks' compliance ourselves, I also need to hear from consumer professionals in the marketplace who work on these issues day in and day out," Smith said. "I am asking these professionals to report to me when they see a mortgage servicer breaking the rules established in the settlement." of recent months and the overall improved capitalization trends of the past few years depends largely on how long the ongoing weakness in the housing cycle exists," the analysts wrote. "Title insurers have proved over the past three years that they can operate somewhat profitably, even in times of severely depressed revenues. Thus, title insurers will continue to be pressured to find ways to reduce expenses until there is some sustained improvement in the housing market."

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