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Fidelity National Financial, Inc. Message Board

  • memewin22003 memewin22003 Oct 4, 2010 2:57 PM Flag

    A "Good faith" buyer won't loose their title:

    In FNF's press release management refered to the right of a good faith purchasers not being injured by a flawed foreclosure title. Below is a brief explanation of the "good faith law:

    "The term good faith is used in many areas of the law but has special significance in COMMERCIAL LAW.

    A good faith purchaser for value is protected by the UNIFORM COMMERCIAL CODE, which every state has adopted. Under sections 1-201(9) and 2-403 of the code, a merchant may keep possession of goods that were bought from a seller who did not have title to the goods, if the merchant can show he or she was a good faith purchaser for value. To meet this test, the person must be a merchant, must have demonstrated honesty in the conduct of the transaction concerned, and must have observed reasonable commercial standards of fair dealing in the trade.

    A buyer would likely meet these requirements if the purchase proceeded in the ordinary course of business. If, on the other hand, the purchase took place under unusual or suspicious circumstances, a court might conclude that the buyer lacked good faith.

    Where a non-merchant purchases property that the seller or lender lacks legal title to convey, the issue of good faith is known both as the innocent purchaser doctrine and as the bona fide purchaser doctrine.

    If the purchaser acquires the property by an honest contract or agreement and without knowledge of any defect in the title of the seller, or means of knowledge sufficient to charge the buyer with such knowledge, the purchaser is deemed innocent and the court would require the seller to make the buyer whole.

    Therefore FNF "might" have to defend some of these titles but the outcome would be in favor of the their insured title holders. Few sellers or lenders would bother going to court in a losing cause.

    The market does not like uncertainity so the confusion here - in my opinion - is a great buying opportunity.

36.65+0.93(+2.60%)Jun 29 4:02 PMEDT