When you get a mortgage, a title insurance product protects the lender (and sometimes you) against problems in a property's history, like an unpaid lien from a previous owner. This bill would require Fannie Mae and Freddie Mac — the federally backed enterprises that buy most U.S. home loans — to only accept title protection products that are overseen by state insurance or state financial regulators. If a mortgage uses an alternative that isn't regulated at the state level (such as an attorney opinion letter), the enterprises would have to hold an extra 1 percent of the loan's unpaid balance as a capital cushion. Backers say it keeps homebuyers protected by well-vetted products, while critics argue it could keep closing costs higher by limiting cheaper alternatives.
Corporate Benefits
- Competitive position of state-regulated title insurance products — GSEs must accept only state-regulator-supervised lien and title products
- Capital cushion penalty on non-state-regulated alternatives — GSEs must hold an extra 1% of unpaid principal balance on mortgages using attorney opinion letters or similar products
Average Household Impact
- Borrower access to lower-cost title alternatives — Capital surcharge discourages GSE acceptance of attorney opinion letters and similar products
Congressional Summary
This bill directs the government-sponsored enterprises—Fannie Mae and Freddie Mac—to establish standards for the use of products such as title insurance. (The enterprises facilitate liquidity in the mortgage market by purchasing mortgages and issuing mortgage-backed securities.)Specifically, the enterprises must establish regulations or guidelines for risk management related to loss or damage from liens upon, encumbrances on, or defects in the title to property, or the invalidity or unenforceability of any liens or encumbrances on property by using third party products subject to state regulation.Further, the enterprises must hold an additional 1% of the unpaid principal of any mortgage that does not meet the above regulations or guidelines as part of each enterprise’s minimum capital levels.
Details
- Congress
- 119th
- Chamber
- House
- Status
- summarized
- Action
- Introduced in House
- Action Date
- 2025-05-06
- Date Added
- 2026-04-17
- Source
- Congress.gov →
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