Merger between FNF and LPS is not unexpected

As reported here earlier in September this year, the  proposed merger of the world’s largest title insurance underwriter, Fidelity National Financial (parent of Fidelity Title, Chicago Title, Lawyers Title and Commonwealth Title), and the country’s largest mortgage servicer, Lender Processing Services, is not unexpected. The original deal would merge the two giants into a “cradle-to-grave” mortgage services platform enabling the largest lenders in the United States to send a high volume of refinance business exclusively through the Fidelity/LPS system. The Federal Trade Commission (FTC) which reviews possible mergers for anti-trust and anti-competitive conduct has proposed a recent settlement. Again, the resulting merger between FNF and LPS is not unexpected.  Nevertheless, on behalf of independent land title agents who will now be prevented from having meaningful market access to the customers of the “cradle-to-grave” closed system created by the merger, we do not believe that the merged entity will help lower settlement costs for consumers or provide a healthier title insurance marketplace.  Knowing the troubled compliance histories of both of the merger participants, NAILTA and others were right to be skeptical.  We are confident that history will view our opposition to the transaction as prophetic....

Possible Fidelity/LPS Merger: Bad for Independent Title Agents, Bad for Consumers.

A proposed merger of the world’s largest title insurance underwriter, Fidelity National Financial (parent of Fidelity Title, Chicago Title, Lawyers Title and Commonwealth Title), and the country’s largest mortgage servicer, Lender Processing Services, is readying to close soon. The deal would merge the two giants into a “cradle-to-grave” mortgage services platform enabling the largest lenders in the United States to send a high volume of refinance business exclusively through the Fidelity/LPS system. The transaction is currently being investigated by the Federal Trade Commission (FTC) which reviews possible mergers for anti-trust and anti-competitive conduct. As part of the proposed transaction, LPS will then be combined with ServiceLink, Fidelity’s national title insurance provider, to process and close a recurring cycle of title insurance business. The result of this combination will be to exclude independent title agents who write for Fidelity and those who do not from being able to access large lender refinance business. The proposed merger is bad for consumers because, while title insurance prices for the ServiceLink business are discounted versus traditional title insurance rates, the consumer is unaware of the fact that non-traditional search products and services are applied to the title search process, thereby exposing the consumer to risks not present in a traditional title insurance environment. Moreover, consumers lose the value of having a fiduciary who is not involved in the affiliation provide services. NAILTA opposes the merger and has researched a white paper outlining its...