Which YOU seem to lack. Everything he said has always existed and always will so what's your point? We live in a litigious society where actions can brought to court. BFD. If you don't like the nature of the business, buy or short it but don't blow out your cheeks like it's a big deal. It is the business of title companies. If that is what you are basing buying puts or shorting on, you might want to research the sector a bit instead of acting on the words of a paralegal over lunch.
One of the big new sources of claims I saw coming through at LFG (prior to my canning) was claims from the borrowers that they did not sign the note (and the mortgage/Deed of Trust). A policy does not just insure clear title, it insures who is in title, and for a loan policy the validity and priority of the new lien. FNF could go after the closing/escrow company, unless it is them. But the borrower/lender goes after FNF directly, with a policy claim, not the closer. They can make claims against FNF for some other types of closing/escrow mistakes/wrongdoing based on a separate written promise from FNF to the lender (and secondarily the borrower) called the closing protection letter, that is required by any lender that knows the difference between APR and APY.
Because of the amount of foreclosures, people are putting in claims against title companies blaming their own demise on defective titles. Serious issues like encroachments, land divisions, flood plains. etc