President-elect Donald Trump. Photo: Diego M. Radzinschi/ALM
When he takes office in 2025, President-elect Donald Trump will likely abandon the Biden Administration’s proposed plan to scrap title insurance requirements for lenders on certain loans.
In March 2024, the White House announced that the Federal Housing Finance Agency had approved policies and pilots to reduce closing costs for homeowners, including a pilot to waive the requirement for lender’s title insurance on certain refinances.
“This would save thousands of homeowners up to $1500, and an average of $750, and the lower upfront fees will unlock substantial savings for homeowners as mortgage rates continue to fall and more homeowners are able to refinance,” the White House said in the release.
With President-elect Trump building his administration ahead of the Jan. 20, 2025 inauguration, PropertyCasualty360.com spoke to Kevin Bradley, founder and CEO of Tower Title, about Biden’s plan moving forward with Trump taking office.
PropertyCasualty360.com: Why has the White House announced plans to scrap title insurance?
Bradley: The housing market crisis has had a significant impact on most Americans the last several years, mortgage rates have tripled, and housing affordability has become increasingly challenging. Biden’s Administration, during an election year, was searching for a solution that may ease housing costs for some Americans.
Their short-term solution would potentially save certain homebuyers $750 to$1500. However, asking the consumer to trade the protection and peace of mind of title insurance to save a small amount of money (in comparison to other home buying costs) is not a trade-off Americans should be willing to accept.
PropertyCasualty360.com: According to the White House, the plan would only drop title insurance on certain refinances. What loans would be impacted and why?
Bradley: Biden’s piloted program targeted only a small percentage of transactions. Specifically, the loan would have to be a federally backed mortgage (ie. Fannie Mae) and be limited to low-risk refinance transactions.
PropertyCasualty360.com: Are dropping title insurance requirements a good idea?
Bradley: The American Land Title Association (ALTA) critiqued the program as a “purely political gesture offering a false promise of savings for homeowners.”
Given the program targets higher-wealth homeowners with large equity in their homes, other proponents suggest that the waiver program would do nothing to expand affordable homeownership opportunities to those in need.
PropertyCasualty360.com: Will the plan proceed with Trump in office?
Bradley: No, the plan is unlikely to move forward under the Trump Administration. Even before the recent election, there was significant opposition to the program.
Trump mentioned his plan to implement an overhaul in leadership across regulatory agencies, including those directly affecting the mortgage industry. Although the Federal Housing Finance Agency (FHFA) initially endorsed the pilot program, there will likely be significant personnel changes within the agency, who are unlikely to endorse the program.
While an extremely difficult task, if Trump can lower mortgage rates, similar to his last presidential term, it will help offset closing costs and increase housing affordability. If that happens, it will become less foreseeable that any title insurance regulations are implemented.
PropertyCasualty360.com: Is Trump's strategy on housing similar?
Bradley: No, he has a free market approach. Regulation is needed when there is little competition. However, since there is fierce competition within the title insurance space, Trump suggested that he will implement changes that positively impact consumers, rather than lenders.
For example, he mentioned the possibility of making the lenders cover the costs of the title insurance premiums rather than the consumers.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.