Fidelity National Falls as Shutdown Seen Hurting Sales

Fidelity National Financial Inc. fell for a fourth straight day as Fitch Ratings said that the partial U.S. government shutdown stands to hurt title insurers because it could harm housing.

Fidelity National, the largest U.S. title insurer, slipped 0.5 percent to $26.19 at 4:15 p.m. in New York. First American Financial Corp., the No. 2 seller of the coverage, dropped 1.2 percent. The companies use their records to check that a seller is a property’s true owner and that it’s free from liens.

Republicans and Democrats are deadlocked on spending legislation, leading to a partial government shutdown and the furlough of about 800,000 federal employees. Closures at the Internal Revenue Service, Social Security Administration and Department of Housing and Urban Development could delay needed verifications that help complete home sales, Fitch said.

“Title insurers are sensitive to macroeconomic factors such as employment levels, consumer sentiment, and interest rates and therefore the duration of the shutdown is a vital factor in determining its affect,” Fitch said today in a statement. “The longer the government shutdown lasts, the bigger the potential profitability impact to title insurers.”

Tax Records

The absence of federal workers who verify Social Security numbers and provide IRS tax records may delay some loan approvals. Many lenders use tax transcripts to confirm the returns that borrowers provide are valid. Borrowers who are seeking mortgages backed by the Federal Housing Administration may also see delays.

D.R. Horton Inc., the largest homebuilder by revenue, fell 2.8 percent to $18.54. The Fort Worth, Texas-based company has lost 6.3 percent this year.

Fidelity National, based in Jacksonville, Florida, is up 11 percent in 2013, and Santa Ana, California-based First American has advanced 1.1 percent.

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