According to a recent report by First American, the title insurance industry plays a crucial role in mitigating over $600 billion in risk annually for home buyers. This highlights the importance of title professionals in maintaining accurate property ownership records, which is essential for a stable real estate market. Mark Fleming, the chief economist for First American, emphasized that the industry's work includes curative efforts such as aggregating data, identifying risks, and resolving errors in public records [70b6af9b].
The report also noted that pre-pandemic risk exposure in the title insurance sector was estimated to be between $600 billion and $900 billion. However, the surge in sales and refinancing during the pandemic has increased this risk exposure to over $1 trillion. This increase underscores the industry's critical role in the real estate economy, especially as the degradation of public records can significantly reduce title marketability and escalate legal burdens for homeowners [70b6af9b].
In the context of the broader mortgage market, Morningstar DBRS recently announced that federal reforms are set to rejuvenate the insured mortgage market in Canada. Key reforms include the introduction of 30-year amortizations for first-time home buyers and an increase in the price cap for insured mortgages from $1 million to $1.5 million. These changes have led DBRS to revise its outlook for insured mortgages positively, contrasting sharply with previous budget measures that were expected to have minimal impact on the market [29d34b46].
The value of banks' insured mortgages in Canada has decreased significantly since mid-2016, dropping by approximately $150 billion to a current total of $385 billion. In contrast, the value of uninsured mortgages has nearly tripled, reaching $1.2 trillion. Despite these challenges, DBRS anticipates renewed growth in the insured mortgage segment starting in mid-December 2024, although there are some risks associated with higher-priced properties [29d34b46].
In the United States, investors in Fannie Mae and Freddie Mac are hopeful for privatization under the Trump administration, with advocates like Mark Calabria and Chris DeMuth Jr. supporting the idea. However, Christopher Whalen warns that privatization could disrupt the mortgage market and suggests an agreement with the US Treasury to backstop mortgage-backed securities [a92b529a][1c83f817].