D.C. City Council Tweaks New Foreclosure Law In Response To Bellyaching Title Insurers Who Threatened To Stop Issuing Coverage On REO Sales

In Washington, D.C., The Washington Post reports:

• The D.C. Council enacted emergency legislation Tuesday to amend a controversial clause in its foreclosure mediation law that threatened to stall the sale of foreclosed affected homes across the city.



• The move came just days after The Washington Post reported that two large title insurers, which account for nearly 80 percent of the D.C. market share, stopped insuring sales of foreclosed homes because of concerns over the law.

***

• “The issue is resolved,” said Roy Kaufmann, a lobbyist for the D.C. Land Title Association, which includes the two insurers, Fidelity National Title Group and First American Title Insurance, which withdrew from the foreclosure market.



• Fidelity and First American had argued that the council’s law, which requires lenders to begin mediation with a homeowner before foreclosing on a home, was too broad and posed too much risk for them in insuring foreclosed properties.



• To allay their concerns, the council took out a controversial clause, which said that any violation of the law would void a foreclosure sale, and replaced it with specific language endorsed by the D.C. Land Title Association about what constitutes a violation.

For more, see D.C. Council alters foreclosure law, adds new consumer rights.