The loan became delinquent. The borrowers filed bankruptcy and abandoned the property. When the lender began foreclosure it learned for the first time that the IRS had recorded a tax lien against these borrowers, also on October 22, which attached to the property ahead of the insured deed of trust. No search of public records would have found this lien on the day of closing. First American undertook negotiations with the feds.
Title insurance protects against undisclosed matters as of the policy date.
Stock price updated from a source other than First American.