When President Joe Biden spoke about title insurance during his State of the Union address, the industry became a focus of the administration’s affordable housing plan. In June, the Consumer Financial Protection Bureau (CFPB) issued a request for information (RFI) on mortgage closing costs, bringing with it questions about what could be next. The government-sponsored enterprises (GSEs) are also looking into title waivers, and there is a renewed interest in attorney opinion letters.
All of this could present a shift for the industry.
“While the RFI itself is not directly impacting us, it’s certainly a possible sign that the entire mortgage industry — especially title — will be under even heavier scrutiny in the coming months and years,” said Aaron Davis, CEO, Florida Agency Network. “If it serves as a call to action that spurs us into accelerating the improvement of the overall process through better use of resources, more digital processes and the like, then it will have a positive impact. Of course, any time we experience challenging economic conditions, the housing industry overall gets looked at a little more carefully. But I believe we will come through this better for it, in spite of the likely challenges.”
Cheri Hipenbecker, general counsel, Knight Barry Title Group, said that if she had been asked about title alternatives in the fall, she would have said they were going nowhere.
“That changed on March 7, 2024, when President Biden included these two critical sentences in his State of the Union address: ‘And my administration is also eliminating title insurance [fees] on federally backed mortgages. When you refinance your home, you can save $1,000 or more as a consequence,’” she said. “These two sentences came as a surprise to our industry and from what we understand, even some members of the Biden administration since Fannie Mae withdrew its title waiver pilot program in August 2023. But as of March 7, 2024, the idea of eliminating title insurance as part of the residential mortgage lending process was back on the chalkboard.”
The Legal Descriptionheard from a slew of industry experts and regulators, including Knight Barry Title Group President and CEO Craig Haskins, Bailey Helms Legal managing member Deborah Bailey, Holler Law Firm Chief Legal Officer Deborah Everett, Florida Department of Financial Services Chief of the Bureau of Investigation of the Division of Insurance Agency and Agency Services Ray Wenger, Virginia Bureau of Insurance Manager of the RESA Investigation section of the Agent Regulation Division Angela Crooker, Arizona Department of Real Estate Commissioner Susan Nicolson, The Gilroy Firm Managing Partner Monica Gilroy, and Blair Cato LLC Chief Operating Officer/owner/attorney Cynthia Blair.
To read their comments, read the entire story in the Real Estate Compliance Outlook in-depth report.