Fidelity National Finance says robo-signers will not affect title business
Fidelity National Financial (FNF), a title insurance company, said recent foreclosure suspensions from Ally Financial and JPMorgan Chase will not "have a material adverse impact" on its business. Title issues may come up while servicers sort out how many cases have been affected by faulty affidavits signed without a knowledge of the documents or a notary present. According to a story in Bloomberg, it may become "a nightmare." Ally Financial, formerly GMAC Mortgage, and JPMorgan Chase have already suspended foreclosures in 23 states. But FNF said these policies will not result in additional claims exposure to its business because new owners and their lenders would have the rights of good faith purchasers, which "should not" be affected by the defect documents. "Even if a court sets aside a foreclosure due to a defect in documentation, the foreclosing lender would be required to return to our insureds all funds obtained from them, resulting in no loss under the title insurance policy," according to an FNF statement out Thursday. FNF and First American Financial Corp. (FAF) hold the largest shares of the title market. The FNF stock has dropped 4.96%, and FAF stock has fallen 2.95% after the lenders announced problems in the process. Write to Jon Prior.