ALTA continues to take the lead in engaging with state regulators, the Federal Housing Finance Agency (FHFA), Fannie Mae, Freddie Mac and lenders about the risks of a pilot program waiving title insurance requirements, as well as the hazards unregulated title insurance products including certain attorney opinion letters (AOLs) present to lenders and consumers
Fannie Mae Pilot Program
- According to a report, Fannie Mae is developing a pilot program to provide a waiver from any title insurance requirements for certain loans it purchases.
- ALTA sent letters to members of the House Financial Services and Senate Banking committees to share concerns regarding the pilot program.
- Several members of the Senate Banking Committee have warned FHFA Director Sandra Thompson against repeating past mistakes learned from the 2008 financial crisis by allowing the Government Sponsored Entities (GSEs) to extend themselves and take on more risk.
- The Risk From Fannie Mae’s Mission Creep: As we witnessed with the recent bank failures, financial institutions that move beyond their mission and scope can introduce significant risk to consumers and taxpayers. Shortcuts to well-established processes do not end well—as the 2008 financial crisis demonstrated.
Unregulated Title Insurance Products
Fannie Mae and Freddie Mac are now accepting written AOLs in lieu of a title insurance policy under limited circumstance as a result of Equitable Housing Finance Plans announced earlier by the FHFA earlier this year.
- ALTA highlights the risks of unregulated, alternative title products for lenders and consumers
- ALTA developed a comparison chart that highlights the more comprehensive protection an ALTA Loan PolicyprovidesversusanAOL with a liability wrap.
- U.S. Reps. Brad Sherman and Blaine Luetkemeyer warn FHFA that these initiatives risk exposing consumers to harm by not providing the same consumer protections as title insurance.
- U.S. Rep. Bryan Steil asks the FHFA for more details about the decision to accept AOLs
- ALTA has given presentations to the National Association of Insurance Commissioners (NAIC) highlighting questions regulators should be asking about unregulated products in the market.
- Let's Not Let History Repeat Itself With Sloppy Affordable Housing Policy: Donnell Williams, the president of the Black Real Estate Professionals Alliance and former president of the National Association of Real Estate Brokers, says there is a critical need to continue to work on affordable homeownership solutions, but unproven shortcuts like accepting unregulated attorney opinion letters in lieu of a title policy could ultimately expose both consumers and lenders to greater financial challenges.
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Let's Not Let History Repeat Itself With Sloppy Affordable Housing Policy
Donnell Williams, president of the Black Real Estate Professionals Alliance and former president of the National Association of Real Estate Brokers (NAREB), says that while there is a critical need to continue to work on affordable homeownership solutions, unproven shortcuts like accepting unregulated attorney opinion letters in lieu of a title policy could ultimately expose both consumers and lenders to greater financial challenges.
Opinion: The Risk from Fannie Mae’s Mission Creep
Reports of a new Fannie Mae pilot program would take us down a risky path, ALTA CEO Diane Tomb noted in a recent HousingWire column. As we witnessed with the recent bank failures, financial institutions that move beyond their mission and scope can introduce significant risk to consumers and taxpayers. Shortcuts to well-established processes do not end well — as the 2008 financial crisis demonstrated.
ALTA Shares Concern of Reported Fannie Mae Pilot With Congress
ALTA sent letters to members of the House Financial Services and Senate Banking committees to share concerns regarding Fannie Mae’s reported consideration of a pilot program that would provide a waiver from any title insurance requirements for certain loans the government sponsored entity (GSE) purchases.
Fannie Mae Rumored to be Looking at Forgoing Title Insurance
The title insurance industry is often bemoaned for being antiquated and making minimal changes, but that has not been the case for the past 12 months. Nearly a year after announcing that it would begin accepting attorney opinion letters (AOLs) in lieu of title insurance in limited circumstances, Fannie Mae is yet again making waves in the title insurance industry.
Title Insurance vs. Alternatives: Considering the Claims Process
The possibility of lowering upfront costs for borrowers by using title insurance alternatives, which are now more widely accepted by major secondary market participants, has become more of an option for lenders and borrowers, but there's more to consider than the initial price tag.
