Cezary Podkul, Washington Post
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 change will make it easier for buyers of foreclosed homes to obtain loans, because title insurance, which protects mortgage lenders from challenges to their rights to a property, is an essential ingredient in the home-buying process. That, in turn, could help stabilize District prices by speeding the sales of homes in the foreclosure pipeline.
“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.
