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Re: Insurance after Foreclosure and Purchase of REO

Posted on Wednesday, March 16, 2011

To: All Florida Offices and Agents of
Chicago Title Insurance Company
Commonwealth Land Title Insurance Company
Fidelity National Title Insurance Company

From: FNTG Florida Agency Underwriting Department

This Bulletin supplements Underwriting Bulletin 2010-23.
The Bank of America (“BofA”) Master Indemnity Agreement is still in place. You are authorized to insure parties buying REO from BofA or its affiliates as described therein.
Insurance of third party purchasers at the foreclosure sale must be approved by state counsel.
For all other REO sales (i.e., sales of property by the lender or its affiliates that was acquired by the lender through the foreclosure process), you must require a Florida Statutory Form of Warranty Deed or Special Warranty Deed. You may not insure title based on a Quit Claim Deed or any type of deed that does not contain general warranties sufficient to cover any deficiencies in or challenges to the foreclosure process. It is the intention of the Company not to assume liability for such deficiencies in the foreclosure process that, as recent history shows, may not be apparent upon examination of the available records. Any request for indemnities from the lender in lieu of the warranties must be referred to state and regional counsel. A deed from the entity that acquired the title in the foreclosure process to another lending/servicing entity, such as a repurchase of a loan from a governmental insurer by the originating lender after foreclosure must contain warranties, or a separate indemnity must be given by an appropriate entity in order to insure the ultimate resale by the lender. In addition, ALL STATE SPECIFIC GUIDELINES PREVIOUSLY DISTRIBUTED MUST BE COMPLIED WITH. Any deviation from this Policy must be approved by state or regional counsel.
The FNF Family of Companies will continue to insure subsequent resale or mortgage transactions where the grantor or mortgagor was a purchaser of REO property, as long as at the time of the present transaction there are no known or pending claims against the property or the prior policy, current state law does not attack the title as insured and it is insured by an owner’s policy issued by the Company or issued by an acceptable non-family insurer. Any significant increase in liability over the existing owner’s policy must be approved by state or regional counsel.
Please contact the Underwriting Department with any questions.

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