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A bunch of 14 state attorneys basic, led by Tennessee, are calling on the Federal Housing Finance Company to finish the Fannie Mae title insurance coverage waiver pilot.
“The inexpensive housing disaster calls for significant bipartisan options, not shortsighted regulatory overreach,” mentioned Tennessee Legal professional Common Jonathan Skrmetti, who penned the letter that joined by his counterparts in Alabama, Arkansas, Georgia, Indiana, Kansas, Louisiana, Mississippi, New Hampshire, Oklahoma, South Carolina, South Dakota, Texas, and Virginia.
“FHFA has acquired the letter and can reply immediately,” an announcement from the company mentioned.
The controversial pilot was first introduced up final 12 months however canceled in August 2023 following widespread opposition.
However the Biden Administration as a part of its efforts to cut back housing prices, revived this system as a part of its State of the Union speech.
“We respectfully name on the Company to halt this misguided effort as a result of the proposed program fails to handle the core difficulty of housing affordability, harms householders and small companies, and improperly expands Fannie Mae’s authority,” the AGs’ letter mentioned.
They be a part of others who’ve spoken out towards the pilot, together with members of each events in Congress.
The American Land Title Affiliation has additionally come out towards the pilot, declaring it will flip the government-sponsored enterprises into the de facto title insurers.
However the trade opposition just isn’t common, with Doma, an underwriter within the strategy of being acquired by Title Useful resource Group, expressing assist; Doma is working with Fannie Mae on one other title pilot.
Whereas the Mortgage Bankers Affiliation additionally opposes the pilot, the Neighborhood House Lenders of America is in favor.
Fannie Mae made a request for proposal from events for this pilot, with a deadline of July 26.
“The pilot program additionally opens householders as much as potential fraud and abuse. House title fraud just isn’t a tutorial danger,” the Tennessee AG letter mentioned. “Whereas title theft just isn’t widespread, tens of hundreds of individuals have been victimized by deed scams, and even probably the most well-known non-public house in America just isn’t resistant to tried fraud,” referring to a latest try contesting possession of Elvis Presley’s Graceland property.
In terms of deed theft, New York Legal professional Common Letitia James has been lively on this space, efficiently main an effort to criminalize this exercise in her house state.
“Title insurance coverage is a state-regulated trade, and householders will likely be higher served if it stays that approach,” the Tennessee letter mentioned.
This proposal just isn’t significant neither is it a bipartisan answer and must be ended, the letter concluded.
“An legal professional basic’s function is to implement state shopper safety legal guidelines, and we at ALTA share the issues raised by the 14 state attorneys basic in regards to the pilot program’s lack of transparency, the shift of title danger from state-regulated title insurance coverage corporations to Fannie Mae, and the impression on native economies,” mentioned CEO Diane Tomb in a press launch. “We applaud their name to terminate the pilot program.”
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