'Dead Market' Kills Alliance Title

From the Modesto Bee:

Alliance Title Co. went out of business, laid off all its employees and closed its doors Thursday. At least 30 employees in Stanislaus County, plus hundreds more elsewhere in the state, lost their jobs with less than one day's notice.
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Terry Harwell, division president for Alliance in Stanislaus County...said he was shocked to hear his four offices -- three in Modesto and one in Turlock -- were being closed and that he and everyone else was being let go. "We're the market-share leader in Stanislaus County, so it didn't seem viable that they would close us down," Harwell said. "We were on pace to break even this month."
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In 2005, at the peak of the real estate buying and refinancing boom, Alliance had more than 200 offices and about 2,500 employees in California, Harwell said. That included 10 branches and about 165 employees in Stanislaus County. "Two years ago, we made a ton of money," said Harwell, noting that Alliance raked in $370 million that year.

Then the housing market began crashing, and Alliance started slashing staff. Harwell closed six Stanislaus County offices and eliminated more than 100 jobs this year. He also closed six branches in Merced and Fresno counties. About 14 employees in a Lathrop title service center were let go Thursday...[E]scrow transactions dropped dramatically the last two years. In August 2006, Alliance processed 715 transactions in Stanislaus County, but that declined to 348 in August 2007.

From the Redding Record Searchlight (hat tip Suzanne):

Fredericka Martin of Real Estate 1 in Redding, who worked in the title insurance industry for 25 years before becoming a real estate agent, speculated that the housing slowdown had little to do with Alliance Title closing. "Normally with a big company, if they are having problems, somebody will buy them," Martin said. "When they just close the doors, something went bad and I have no idea."
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But Bob Martin of Summit Mortgage in Red Bluff said the chilled housing market had everything to do with Alliance Title's demise. "More people are losing their homes. ... We are in the worst real estate market in 20 years," Martin said. "A title company has to sell title insurance policies to stay alive. It's the lack of business; it's a dead market."

From the Modesto Bee:

Staggering and bleary-eyed from yet another "inevitable" growth binge hangover, valley residents are still trying to assess the costs of their latest housing boom. One effect is in the form of a new kind of eyesore -- "brownies," abandoned houses where the yards and gardens have died and the lights are either never on or never off. But things might be even worse than they look.

In Modesto, the City Council is struggling to manage yet another budget shortfall. The solutions are likely to include a reduction in the number of police and fire positions -- this in a city routinely ranked among the highest in the nation for such crimes as auto theft.

From the L.A. Land blog:

The relatively new foreclosure auction tracking service ForeclosureRadar reports that banks and lenders are starting to offer discounts on foreclosed homes at the initial auctions, with discounts running as high as 42% of what is owed on the house...Example: A Stockton home with an underlying foreclosed loan of $419,000 was recently auctioned with an opening bid of $240,000 -- a discount of 42.8% from the bank's investment -- and still attracted no bids, [Sean] O'Toole says.

Sacbee.com has a poll on the mortage rate freeze plan. Vote here.