The Trump administration has crushed the hopes of title insurers who wanted to put the brakes on a Fannie Mae pilot program that lets some homeowners refinance their mortgage without having to pay for title insurance.
Instead of killing the program, Bill Pulte — the head of Fannie Mae and Freddie Mac’s federal regulator — expanded it this week by announcing certification of a second provider of title insurance waivers, Westcor Land Title Insurance Company.
“Effective today, in order to further reduce closing costs for homeowners, and foster more competition, we will be adding a second vendor — Westcor — to Fannie Mae’s title acceptance pilot on certain refinances,” Pulte announced Thursday on the social media platform X.
A trade group for title insurers, the American Land Title Association (ALTA), has led the opposition to the pilot program and other title insurance alternatives previously endorsed by the Biden administration and consumer groups, who say they can broaden access to homeownership.
In a Nov. 18 letter to Fannie Mae and Freddie Mac’s federal regulators, 17 members of a “bipartisan Congressional Real Estate Caucus” endorsed by ALTA demanded that the pilot program be halted “until proven beneficial for homebuyers.”
Under the leadership of Biden appointee Sandra Thompson, the Federal Housing Finance Authority (FHFA) approved a “small-scale, limited duration” title acceptance pilot program in March 2024, and Fannie Mae issued a request for proposal to potential industry participants last summer.
When the nation’s biggest mortgage lender, United Wholesale Mortgage, jumped on board the pilot program in December, ALTA said FHFA should wait for the incoming Trump’s administration to take control before allowing it to be expanded.
“If the FHFA allows this pilot program to move forward during this transition period, it once again raises questions about the agency not only disregarding the views of policymakers but also flaunting any semblance of an open and transparent regulatory process,” ALTA said in a statement to Inman at the time. “Any program that waives title insurance is simply bad for consumers, bad for lenders, and bad for taxpayers, and should be halted as bipartisan lawmakers have requested.”
As Trump’s pick to lead the FHFA, Pulte has halted programs and practices that were intended to boost lending in minority communities, protect borrowers from unfair or deceptive practices, and assess risks associated with climate change.
The title acceptance pilot program will continue testing whether automated title reviews can substitute for title insurance or attorney title opinion letters on low-risk refinance transactions where there is confidence that properties are free and clear of prior liens or encumbrances.
Doma Title, a company that uses a machine learning platform to automate title and escrow processes, was the first program vendor, using a title risk assessment model to generate waivers that allow qualifying borrowers to avoid the expense of paying for lender’s title insurance.
The new title acceptance vendor announced this week — Maitland, Florida-based Westcor — said it’s partnering data and analytics compay X1 Analytics and policy issuer Mortgage Connect LP to offer a “a title insurance-backed product.”
“While this policy departs from the traditional title insurance model in scope, it retains the core benefits and legal assurances that are the hallmark of the industry,” Westcor said in a statement. “This approach ensures that both borrowers and lenders are protected while supporting efforts to deliver real savings at the closing table.”
ALTA CEO Chris Morton, who suceeded Diane Tomb as the trade group’s leader in June, struck a more conciallatory tone in a statement to Inman Friday.
“ALTA and the title industry continue to develop innovative solutions using title insurance that support housing affordability and expand access to homeownership while protecting the places people call home,” Morton said. “Title insurance and the more than 100,000 title professionals who work in every community across the country are vital to providing certainty in the real estate market and ensuring secure and efficient real estate transactions.”
Doma Chief Operating Officer Wendy Zorick also put a positive spin on the news, saying in a statement to Inman that, “It’s exciting to see a major player in the title insurance industry join Fannie Mae’s pilot program, which is saving homeowners money and making the closing process much more efficient. We applaud Director Pulte for his commitment to reducing closing costs for hardworking Americans.”
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