March 8, 2024

White House announces pilot project to waive requirement for lenders' title insurance on certain refinances

In addition to official statements issued yesterday, President Biden addressed the project during his State of the Union speech last night: "And my administration is also eliminating title insurance on federally backed mortgages. When you refinance your home, you can save $1,000 or more as a consequence." 

Information from White House on Pilot Project

“In the coming months, the Department of Treasury’s Federal Insurance Office will convene a roundtable of relevant industry stakeholders, including consumer advocates and academics, in order to discuss the title insurance industry and analyze potential reforms. Building on today’s announcements, President Biden is calling on federal agencies to take all available actions to lower costs for consumers at the closing table and help more Americans access homeownership.”
Read more in White House Fact Sheet »

Statement from FHFA Director Thompson

"The recently approved title acceptance pilot will waive the requirement for lender’s title insurance or a legal opinion on certain low-risk refinance transactions where there is confidence that the property is free and clear of any prior lien or encumbrance. The title acceptance pilot will make it possible to test whether allowing lenders to sell these refinance loans is a responsible approach to reducing the closing costs incurred by existing homeowners. Lenders will also retain the option to provide evidence of clear title through other options, such as title insurance or an attorney opinion letter (AOL). And homeowners are always able to purchase their own title insurance policy or AOL, if they so choose."
Read more of Director Thompson's statement »

Statement from ALTA

"Since the waiver program was first reported, the Federal Housing Finance Agency (FHFA) has faced strong bipartisan opposition. Several members of Congress asked FHFA Director Sandra Thompson about such a pilot during a May 23, 2023, House Financial Services Committee hearing and expressed concern that Fannie Mae would be expanding outside their charter by operating in a primary market business with this pilot program.

"In August, Fannie Mae and FHFA confirmed to ALTA that the title waiver pilot program was abandoned – a decision that was clearly overridden elsewhere in the Administration. The Administration should not be playing politics with the American Dream."
Read more of ALTA's statement »

TLTA Will Be Actively Engaged in Opposing This Policy Shift and Will Keep You Updated

"We maintain our opposition to this pilot program and any other program that undermines the importance of title insurance in all real estate and mortgage transactions," said Rodney Anderson, President of Texas Land Title Association. "We will be actively engaged in the effort to educate lawmakers and regulatory officials about the value of title insurance, the misinformation surrounding the touted benefits of this pilot project, and our strong opposition to this latest policy change which will negatively affect consumers and homebuyers, adding risk to their transactions without the purported cost savings."
If you have questions, please send them to Aaron Day or call Aaron at 512.810.8800, thank you.