California lenders may soon be able to use a new product to protect against title liens and encumbrances.
Fidelity National Financial has presented "Master Lein Protection Loan Policy of Title Insurance" to the California Department of Insurance, the company said.
In a press release, the California-based seller of title insurance announced what it called the first "pool" title insurance policy offered by a title insurer.
Fidelity's description of the product is similar to the description of Radian Lien Protection, a product that has been under a cease-and-desist order in California since June 2002. Both products would offer pool insurance policies to lenders and both products would forgo exacting title searches. Also, both products were to be offered as protection on home equity loans and second mortgages.
The difference in the products, according to an official at the American Land Title Association (ALTA), is threefold.
James Maher, ALTA executive vice president, said that Fidelity's product doesn't require the borrower to have a proper credit rating or to sign an affidavit. Maher also pointed out that the Fidelity product will be title insurance sold by a title insurer.
As mentioned in a previous story, California title insurance sellers must be licensed and cannot sell mortgage insurance for the same transaction.
Thirdly, Maher said that the Fidelity product will be marketed to lenders who in the past have not used any form of title insurance.
The new product will offer those lenders "something rather than nothing," he said.
When asked to specifically endorse the new product, Maher hedged a bit, but said he liked "products that our members sell."