Logo for The Security Title Guarantee Corporation of Baltimore
From ATLA’s Diane Tomb:
We send out this update to keep you informed on the latest activity from the Federal Housing Finance Agency (FHFA), Fannie Mae and Freddie Mac under their Equitable Housing Finance Plans, including developments related to unregulated title insurance alternatives and other issues that could threaten stability of the housing market.
Following two reports that Fannie Mae is considering a pilot program that would provide a waiver from any title insurance requirements for certain loans the government sponsored entity (GSE) purchases, ALTA sent letters members of the House Financial Services and Senate Banking committees to share concerns about the negative consequences of such a program.
In the letters, we told the committee leaders that Fannie Mae’s proposed expansion of activities beyond the authorities expressly outlined in the Federal National Mortgage Association Charter Act is deeply troubling. In addition, the proposal suggests that Fannie Mae would handle any claims that arise from the servicer, taking on the risk that title insurance companies would normally bear and are reserved to handle.
We are greatly concerned about Fannie Mae handling claims and becoming a de facto title insurance company without being licensed, regulated, or actuarially reserved for what is a primary market business under the purview of state oversight.
Beyond the legality of Fannie Mae entering into the title insurance business directly, we are concerned about how such a product would be marketed to consumers, the coverages it would include, and the additional risk that would be taken on by Fannie Mae and its partner lenders for title matters.
We know our industry works hard to educate consumers on their options and the coverage that different policies do or do not provide. If Fannie Mae removes title professionals from this process, that consumer education will be lost.
In our letters, we urged committee leaders—given their oversight of the Federal Housing Finance Agency (FHFA) and their role to provide for the safety and soundness of the GSEs under conservatorship—to request that the FHFA discontinue Fannie Mae’s work on this proposal and that the FHFA require an open process with public input for any new program under consideration by the GSEs.
As we’ve shared, several members of the Senate Banking Committee have already taken issue with Fannie Mae moving beyond its charter into primary market activities. Last year, lawmakers warned FHFA Director Sandra Thompson against repeating past mistakes learned from the 2008 financial crisis by allowing the GSEs to take on more risk.
Still in conservatorship, Fannie Mae should focus on preserving taxpayer dollars and protecting lenders, investors, and consumers rather than expanding beyond its mission.
What You Can Do
We are engaged with federal policymakers to highlight our serious concerns with these moves by the GSEs, as well as working with policymakers and regulators who share our perspective. Your engagement remains important in this process, including by participating in our upcoming ALTA Advocacy Summit in May, and responding to forthcoming alerts from ALTA. As always, if there are relationships you have with your Member of Congress of which we are unaware, please let us know.

I also encourage you to renew your membership or join the Title Action Network (TAN), our free, grassroots organization focused on promoting the benefits of the title insurance industry. You’ll receive alerts to help us take action and let members of Congress know that actions by the GSEs threaten the stability of the economy and will place undue risk on taxpayers.

Share Your Stories
You can help our advocacy efforts by sharing information about any affordable housing initiatives your companies are already involved in or may have planned. We would love to highlight these efforts in our weekly updates. Even if it’s a closing fee discount to first-time homebuyers, we want to know! Share your initiatives at communications@alta.org.
Comments and questions are always welcome. I can be reached at dtomb@alta.org.
Best regards,
Diane Tomb