18 House Democrats Question Biden Administration’s Title Waiver Program

April 18, 2024

A group of 18 Democratic members of Congress sent a letter to President Biden expressing concern with the administration’s program that will waive the requirement for lender’s title insurance on certain refinances.  

The letter—led by Rep. Wiley Nickel (D-N.C.)—highlighted the important and proven role that title insurance plays in protecting homeowners and lenders and the unnecessary risk the title waiver pilot will place on the government sponsored enterprises (GSEs) and the broader housing finance system.

“While well-intentioned, this pilot program will not address the true issue of housing affordability in our communities and puts homebuyers at risk,” the members wrote. “Title insurance professionals halt fraudulent real estate transactions such as impersonation scams, elder financial exploitation, and attempts to defraud spouses, partners, or other property heirs. Under the new program, consumers and lenders will be forced into a completely experimental claims resolution process with the GSEs, ultimately risking being forced into property sale or foreclosure.”

The letter was also signed by Reps. Jake Auchincloss (D-Mass.), Lou Correa (D-Calif.), Jim Costa (D-Calif.), Joe Courtney (D-Conn.), Angie Craig (D-Minn.), Henry Cuellar (D-Texas), Vicente Gonzalez (D-Texas), Josh Gottheimer (D-N.J.), Joe Morelle (D-N.Y.), Scott Peters (D-Calif.), Brittany Pettersen (D-Colo.), Deborah Ross (D-N.C.), Brad Sherman (D-Calif.), Ritchie Torres (D-N.Y.), Marc Veasey (D-Texas), Jennifer Wexton (D-Va.) and Nikema Williams (D-Ga.).

“While we must find ways to lower housing costs, allowing the GSEs to assume unnecessary risk outside their core mission, possibly violating their charters, is not the path we should take. Fannie Mae and Freddie Mac have been under federal conservatorship since the last time they took on too much risk and helped create the 2008 financial crisis,” the letter said. “We cannot afford to repeat the mistakes of the past. While we work to address the nation’s housing affordability crisis, the GSEs must stick to their core mission of providing liquidity and stability to the mortgage market. Expanding into new, primary market lines of business and acting as an insurer while in conservatorship goes well beyond what the Enterprises are permitted to do and puts taxpayers at great risk.”

In August 2023, Fannie Mae and Federal Housing Finance Agency (FHFA) confirmed to ALTA that the title waiver pilot program was abandoned—a decision overridden by the administration.

ALTA commended the leadership of Nickel and his Democratic colleagues in raising their serious concerns about the administration’s title waiver pilot program.

“While well intentioned, this program is flawed— removing the expertise and protections provided by title professionals and doing little to promote homeownership affordability for those who need it the most while heightening risk at Fannie Mae and Freddie Mac,” said Diane Tomb, ALTA’s chief executive officer. “It is encouraging to have such thoughtful Members of Congress who understand the importance of sound housing policy.”

The letter encouraged the administration to focus on efforts that will truly increase the supply of affordable housing and bring down prices in communities.

“The proposed title waiver pilot misses that mark, and we ask that you reconsider moving forward,” the letter said. “While we understand the enormity of the housing affordability crisis, shifting risk from the well-regulated title insurance industry to the GSEs and pushing small businesses out of the real estate ecosystem is not the right path forward to address that crisis.”

The misguided title waiver program has faced bipartisan backlash from members of Congress since being revived ahead of the State of the Union. Last month, three Republican members from the House Financial Services Committee—Warren Davidson (R-Ohio), Bill Huizenga (R-Mich.) and Andrew Garbarino (R-N.Y.)—wrote a letter to the FHFA questioning whether the program conflicts with the agency’s Prior Approval for Enterprise Products rule.

Contact ALTA at 202-296-3671 or communications@alta.org.