[Editor’s Note: On Wednesday, in the latest development in the “Mortgagegate” scandal, Fidelity National Financial Inc., the largest U.S. title-insurance firm, reversed course and said it wouldn’t require an indemnity agreement before insuring individual foreclosed properties. Money Morning’s Shah Gilani, a retired hedge-fund manager, warns that there’s a deep game being played, and provides investors with detailed insights, and advice on the steps to take.]U.S. taxpayers already own pieces of such problem-plagued companies as General Motors Corp., Chrysler LLC, American International Group Inc. (NYSE: AIG), Fannie Mae (OTC: FNMA) and Freddie Mac (OTC: FMCC). Now the increasingly problematic “Mortgagegate” saga could land American taxpayers in the trouble-ridden title-insurance business.
On Oct. 8, Bank of America Corp. (NYSE: BAC) indemnified Fidelity National Financial Inc. (NYSE: FNF) against any losses that Fidelity might sustain in litigation over title insurance it writes on foreclosed homes – the same homes, coincidentally, that Bank of America wants to sell to new buyers.
This arrangement amounts to U.S. taxpayers, who are the ultimate backers of the Federal Deposit Insurance Corp. (FDIC), backstopping a giant, publicly held title-insurance company, which is backstopping a huge commercial bank, so that the bank can sell properties that it might not have proper title to.
Click throught to the original article on this one. This guy got some interesting feedback