Members of Congress Outline Concerns of Harmful Title Insurance Alternatives in Letter to FHFA

October 18, 2022

U.S. Reps. Blaine Luetkemeyer (R-Mo.) and Brad Sherman (D-Calif.), sent a letter to the Federal Housing Financial Agency (FHFA) outlining questions and concerns on the potential harmful impact of attorney opinion letter alternatives on consumers, lenders, and Fannie Mae and Freddie Mac.

Luetkemeyer is the ranking member of the House Financial Services Subcommittee on Consumer Protection and Financial Institutions. Sherman chairs the House Financial Services Subcommittee on Investor Protection, Entrepreneurship and Capital Markets.

“The plans aim to lower closing costs and make homeownership more accessible for low- to moderate- income and minority homebuyers. 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, increase taxpayer risk which FHFA must consider as the GSEs’ regulator and conservator,” the letter stated.

Luetkemeyer and Sherman requested information to be provided prior to approving the expansion of any GSE closing cost pilot on the use of attorney opinion letter alternative products, including:

  • The data and methodology used by both Fannie Mae and Freddie Mac to formulate the closing cost analyses reflected in their respective plans.
  • A detailed economic analysis of the potential costs to consumers of purchasing attorney title opinions compared to title insurance, broken down by property valuation, transaction type, and geographic market.
  • An analysis of the risks of attorney title opinions compared to title insurance to the property and financial interests of (a) consumers, (b) mortgage lenders, and (c) Fannie Mae and Freddie Mac.
  • Details of how attorney title opinions will be marketed to consumers, including what communications and disclaimers will be made and the steps that will be taken to avoid violations of consumer protection laws.

ALTA commended Luetkemeyer and Sherman for sharing their concerns about broadening the use of attorney opinion letter alternatives in lieu of title insurance.

“It’s critical that all consumers get the strong protections offered through title insurance policies,” said Diane Tomb, ALTA’s chief executive officer. “Attorney opinion letter alternatives do not provide the same level of protection. Should a title issue arise on a property covered by an attorney opinion, the homeowner would need to prove negligence on the part of the attorney to pursue the claim with them. If not proven, a claimant would likely need to pay the legal costs involved to litigate the title matter, posing a financial burden and a significant risk.”


Contact ALTA at 202-296-3671 or

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