Title cos. want promises from 'robo signing' lenders

Report: Bank of America will provide warranties to Fidelity

In addition to satisfying federal and state regulators that they’re following the letter of the law, lenders embroiled in the "robo signing" scandal may soon have to provide warranties to title insurers in order to continue selling foreclosed homes.

Bank of America has already agreed to provide warranties to Fidelity National Financial Inc. that cover the title insurer’s costs if employees processing foreclosure documents for the bank make mistakes, Bloomberg News reports, and is in talks with other title insurers to do the same.

In a weekly e-mail to members Monday, American Land Title Association CEO Kurt Pfotenhauer said the group has been working closely with officials at the Federal Housing Finance Agency (FHFA), Fannie Mae and Freddie Mac, lenders and other stakeholders to secure assurances that lenders have performed proper due diligence on their foreclosures. Pfotenhauer told Bloomberg that the talks include the issuance of warranties.