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Fidelity drops REO warranty plan

Original plan was a response to 'robo-signing' scandal
Published on Oct 27, 2010

Fidelity National Financial Inc. is backing down from a plan to require warranties from lenders limiting the company's liability when insuring title on real estate-owned (REO) properties.Bank of America, which is voluntarily providing such warranties to Fidelity, will continue to do so. But the nation's largest title insurer is dropping a plan to require warranties from all lenders beginning Nov. 1, Bloomberg reports, citing an internal company memo to employees.Fidelity's chief legal officer, Peter Sadowski, told Bloomberg that other title insurers didn't institute similar requirements, putting the company at a competitive disadvantage.Old Republic and Stewart Title Guaranty Co. have said they continue to insure title on REO properties in the wake of media reports that the companies instituted restrictions on insuring foreclosed properties being sold by certain lenders implicated in the "robo-signing" scandal.The American Land Title Association has held talks with lenders an...

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