Insurance giant First American, working in conjunction with IFG Group's legal-service division, has held talks with the Department of Finance about insuring the title of properties being transferred to bad bank Nama. The companies have been working together for several months and hope to generate new business by ensuring that the properties on which developers' loans are secured have full and marketable title.
They also believe that the title insurance would make future securitisations of Nama's loan book more palatable to institutional investors and particularly risk-averse bondholders.
First American is mainly targeting the financial institutions with its products but it also met the Department of Finance's second secretary general Kevin Cardiff on 6 August to brief it on its plans, according to documents which have been seen by the Sunday Tribune.
First American's subsidiary First Title has already developed a similar scheme in Britain, which allowed the receivers of Dawnay Day, which had significant property assets, to sell its portfolio without undergoing a lengthy due diligence process. The title insurance policy sped up the sale process and also made the properties more attractive to potential bidders. It is also a cost-effective alternative to the need for expensive work by solicitors proving title.
"We believe our product offering can contribute significantly to the smooth and effective operation of the Nama process," said a spokesman for quoted financial service company IFG.
First American has annual revenues of more than €4bn. It is the US's largest provider of business information.