https://financialregnews.com/reps-luetkemeyer-sherman-express-concerns-regarding-title-insurance-alternatives/

U.S. Reps. Blaine Luetkemeyer (R-MO) and Brad Sherman (D-CA) recently forwarded correspondence to the Federal Housing Finance Agency (FHFA) Director Sandra Thompson, noting concerns regarding the potentially harmful impact of title insurance alternatives.

“The plans aim to lower closing costs and make homeownership more accessible for low- to moderate-income and minority homebuyers,” the legislators wrote. “However, these initiatives appear to risk exposing these consumers to harm by not providing the same consumer protections as title insurance. They also raise concerns about the safety and soundness of the Enterprises (Fannie Mae and Freddie Mac), increase taxpayer risk which FHFA must consider as the GSEs’ (government-sponsored enterprises) regulator and conservator.”

Luetkemeyer, top Republican on the Subcommittee on Consumer Protection and Financial Institutions, and Sherman (D-CA), top Democrat on the Subcommittee on Investor Protection, Entrepreneurship, and Capital Markets, said the plans position low and moderate-income and minority borrowers at risk of going uninsured against average home buyer common title defects.

“As a result, the attorney opinions imperil the ability of these consumers to be compensated for title issues,” the legislators concluded. “Attorney opinions increase the likelihood these precarious homeowners lose their house and lose the ability to build wealth. The differences between attorney title opinions and title insurance can be confusing to policymakers, mortgage lenders, and legal practitioners. We expect FHFA to address these concerns in a timely manner, prior to approving the expansion of any Enterprise closing cost pilot, in order to give Congress the opportunity to engage further on this important matter.”