I spoke with FNF investor relations today and asked wheather a slow down or halt in forclosures would reduce their policy volume this quarter and was told that it would not because most of their volume is coming from refinancing at lower interest rates.
i agree the number of foreclosured titles insured is small compared to total insured.
the problem fnf faces is that each foreclosured title that WAS insured in the last few YEARS may end up costing the company a WHOLE BUNCH of newly issued insurance policies.
if you dont see that think about this: 1.vast majority of REO insured titles will have to go through some sort of legal process. this process will be different in every state and no-one knows exactly what will be involved. 2. fnf will HAVE to be involved in these legal procedures to defend themselves against claims.
of these legal proceedings, even if we optimistically assume that NONE of them will cost fnf the entire property value, ALL of them will cost fnf lots of money, time, people.