Perception is reality and FNF stock continues to decline:
The American Land Title Association said in an Oct. 1 statement that questionable foreclosures will ultimately have little adverse impact” on new owners of properties or title insurance claims.
However, lenders, loan servicers and even title insurance companies are facing litigation on multiple fronts. This is going to become a nightmare with so many potential avenues of liability.
If a new homeowner’s title is challenged because of a faulty foreclosure, the title insurer may have an obligation to defend the challenge. While litigation is expensive it is unlikely that a court will take property from an innocent homeowner who acted in good faith and return it to a previous homeowner who failed to make payments.”
My suspicion is that this will wind up being an industrywide issue with more than enough class action lawsuits to go around.
"Among the tasks performed by title insurers is reviewing the public record for a court order that confirms a bank owns a particular property before it’s foreclosed on, Pfotenhauer said. "
It is the title company's responsibility to verify the public record, NOT to insure that the public record is valid or fraudulent, that legal liability will fall on the banks and lenders that filed fraudulent public record documentation. That is how I read this.
"If there are problems, banks will be getting sued right and left by the title companies"
With the banks now issuing warranties to title insurers, lawsuits will be unnecessary. Title insurers were not responsible for fraud committed by banks, but the warranties now formalize it. Bad times coming for shortsellers.
I always knew the title biz was a great gig...collect a giant premium on every transaction, then check the title plant, and when we find that somebody else screwed up, we make THEM pay. This is insurance? Not sure it will hold up this time, though. Lot's of lawyers coming.