Title insurance giant Fidelity National Financial has canceled a requirement for lenders to guarantee proper foreclosure procedures, citing "heightened" review processes by several mortgage servicers.
The Jacksonville, Fla.-based company said it will not require an indemnity agreement before insuring individual foreclosed properties, according to a memorandum it issued to employees.
However, according to a report by Bloomberg, FNF will still require indemnifications on REO sales financed by Bank of America.
The nation's largest title insurer reversed course from a requirement put in place a week ago after institutions took steps to police foreclosure paperwork, according to the memo.
Failure of other title insurers to follow Fidelity's lead potentially put the company at a competitive disadvantage.
"Although competition was a factor," said FNF EVP and chief legal officer Peter Sadowski, "we wouldn't take undue risk for competitive reasons. We feel comfortable with the new process."
