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 concerns.