Title Acceptance Pilot

Title insurance is the most effective way to protect the property rights of homeowners and the security of a lender’s mortgage. Historically, Fannie Mae and Freddie Mac (the GSEs) have required a lender’s title insurance policy on loans sold to them.

This one-pager breaks down the main talking points and benefits of title insurance to the American people.

ALTA urges FHFA to ensure any new Enterprise activity, product or pilot is developed through a transparent process with meaningful stakeholder input. The letter raises concerns that efforts to eliminate title insurance requirements on certain refinance loans and expand attorney opinion letters could increase risk for consumers, lenders and the Enterprises while reducing long-standing consumer protections.

In this statement, FHFA Director Sandra Thompson explains the agency’s rationale for the Title Acceptance Pilot, which waives the requirement for lender’s title insurance or a legal opinion on certain low-risk refinance transactions. FHFA frames the pilot as a way to test whether reducing certain closing costs can help homeowners refinance, while stating that the program will be subject to FHFA oversight.

In March 2024, a Title Acceptance Pilot was announced that waives the requirement for lender’s title insurance on certain refinances. ALTA described the initiative as a policy move that offers a perceived promise of savings for homeowners while potentially exposing consumers, lenders, and taxpayers to increased financial risk.

This FAQ helps lenders evaluate the risks of using attorney opinion letters as an alternative to title insurance, including differences in coverage, claims handling, cost, representation and warranty risk, and legal concerns. ALTA emphasizes that title insurance provides broader, regulated protection for lenders and consumers, while AOLs may leave important gaps related to fraud, forgery, closing protection, and title defects that are not discoverable in public records.

Use this document to showcase the benefits of title insurance as well as a cost breakdown analysis of how the money spent on title insurance is used. The median cost of title insurance and settlement services is 0.67% of the purchase price.

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