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Fannie Mae No Longer Pursuing the Title Waiver Pilot Program It Had Under Development
In March, it was reported that Fannie Mae was considering a pilot program that would bypass traditional title insurance. The program would grant certain mortgage lenders a waiver of title insurance requirements for loans sold to Fannie Mae. According to reports, under this proposal some originators would be granted a waiver of the requirement that any loan sold to Fannie Mae be backed by a policy of title insurance. Further, this proposal suggested that Fannie Mae would handle any claims that might arise from the servicer, taking on the risk that title insurance companies would normally bear and are equipped to handle.
Beyond the legality of Fannie Mae entering the title insurance business directly, we had concerns about how such a product would be marketed to consumers, the coverages it would include, and the additional risk for title matters that would be taken on by Fannie Mae and its lender partners.
Since March, CATIC has led a comprehensive advocacy effort that raised concerns about this reported pilot program. A significant component of this effort was the participation of CATIC staff members who shared their concerns with members of Congress during the ALTA Advocacy Summit in May.
In August, ALTA confirmed that Fannie Mae is no longer pursuing the title waiver pilot program it had under development. This pilot will not be submitted to the FHFA for review or consideration. This is a significant achievement in protecting consumers, lenders, and the housing finance system, and showcases the benefits of title insurance.
We want to thank our CATIC employees Anthony Lombardi, Jenny Kallenbach, and Guy DeFrances (pictured), the ALTA staff, and all other industry professionals who advocated for our industry in D.C. All of your efforts are truly appreciated!
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