Fidelity drops REO warranty plan

Original plan was a response to 'robo-signing' scandal

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.