First American Title Insurance Company has recently announced a new "product" of insurance specifically targeting lenders who are partipating in the HARP 2.0 refinance program.
From the January 3, 2012 Press Release issued by First American:
First American's Quick Start HARP solution supports the revised program by helping mortgage lenders develop their own "push" or "pull" approach to soliciting homeowners. In a "push" version, the lender utilizes internal loan data and First American's proprietary title automation to proactively solicit homeowners who might benefit from HARP 2.0. The "pull" version is used when homeowners contact the lender to inquire about HARP 2.0. In both cases, First American's automated title technology delivers a title commitment to the lender in seconds, rather than a non-binding title "decision."
I believe that we would all be well served to remember the same type product that had been offered by First American and it's controlled agencies which resulted in the denial of claims made by Bank of America.
In 2010 Bank of America sued First American for its failure to pay out claims made on the policies which were at that time called "Lien Protection Insurance Policies". These policies, by admission of First American Title were issued to lenders specific to Home Equity Lines of Credit. The policies were issued to lenders without First American Title and its controlled agencies performing a full and complete title search. Instead First American and it controlled agencies relied upon the credit scores of the borrowers as well as lender's underwriting standards.
While I do not have specific information related to the actual policy of insurance that is being offered to lenders it only makes sense given past history that First American is once again offering a policy of title insurance, which is to be relied upon by lenders and those entities who purchase the loans in the future, which may or may not actually be insuring anything.
First American has not, at least not to my knowledge, offered any particulars to the public about this new policy of insurance.
A fellow title agent Glenn Freezman of Family Abstract has been attempting to get information about this product from First American and this was the last response he received from them:
[In a discussion with] Patrick E. McLaughlin, president of First American Mortgage Services, a division of First American Title Insurance Company and the exclusive provider of Quick Start HARP. He explained that this is a program for "ONLY" the largest lenders and First American as a way of retaining portfolio.
So that being said I think we can only assume that First American is targeting the likes of Bank of America (again) Wells Fargo, Ally Financial, JP Morgan Chase and other large lending institutions in an attempt to sell this title "policy" based on an instant title search done in house by First American Title and/or its controlled agencies.
As a professional title agent who has been offering title insurance to Maryland consumers for more than 25 years, I can honestly say that there is no way in which to offer an instant title search based on data bases only; at least not one that will stand up to any scrutiny.
I certainly cannot predict the future, but if the past is our teacher, we can most certainly see the writing on the wall with this debacle. Prepare for another bail-out