Title insurance company Fidelity National Financial Inc. will soon begin requiring lenders to indemnify Fidelity against the possible risks associated with faulty foreclosure paperwork.
For all foreclosure sales closing on or after Nov. 1, Fidelity will require lenders to sign an indemnity agreement that protects the insurer from ‘incompetent or erroneous affidavit testimony or documentation,’ Bloomberg reports.
The company has already entered into such an agreement with at least one major lender, Bank of America.
‘It is important for the servicers and the lenders to represent to us and to the people we are going to be insuring that there are no problems,’ Peter Sadowski, Fidelity National's executive vice president and chief legal officer, told Bloomberg.
In the article, Kurt Pfotenhauer, CEO of the American Land Title Association, called for market-wide adoption of such indemnification agreements.