ALTA Warns of Risks from Title Insurance Alternatives

The American Land Title Association (ALTA) is highlighting risks to homeowners and lenders from title waivers and unregulated alternatives to title insurance tied to the Federal Housing Finance Agency (FHFA)'s title acceptance pilot.

On Friday, April 12, ALTA Chief Executive Officer Diane Tomb shared an update on current developments, provided facts about title insurance and outlined steps title professionals can take to challenge federal efforts to advance this initiative.

The update included a link to an American Legislative Exchange Council (ALEC) blog suggesting the pilot program threatens property rights, making homeownership riskier and undermines state law governing title insurance. The ALTA also cited other organizations that pointed out severe problems with the Consumer Financial Protection Bureau (CFPB)’s plans to oversee the program.

While the ALTA acknowledged merit in the Biden Administration’s desire to address anticompetitive closing costs and improve housing affordability, it provided a list of reasons why title insurance is not part of the problem – and doing away with it could create new ones.

  • Title waivers and attorney opinion letters (AOLs) do not protect homeowners or lenders if a future title claim emerges.

  • Title insurance is one of the most essential, but least expensive, parts of the home buying process.
  • In a period of increased inflation, the cost of title insurance coverage has decreased over the last several years. The cost of title insurance coverage has decreased 7.8% nationally since 2004 and roughly 5% from 2019 to 2021, based on recent industry financial statements. 
  • Fees for title insurance and other closing costs must be provided and disclosed to consumers under a federally mandated rule that the CFPB developed in 2015. Calling title insurance and closing costs “junk fees” is disingenuous and conflicts with the White House’s own definition, which cites the lack of disclosure of the fee being charged.
  • The CFPB’s own research shows these disclosures are working to educate consumers about closing costs. The CFPB report praised its own rule for improving “consumers' ability to locate key information, compare terms and costs between initial disclosures and final disclosures, and compare terms and costs across mortgage offers.”
  • Title insurance is comprehensively regulated at the state level by departments of insurance, and title insurance companies are required to file their policies and rates with state regulators to ensure they are fair, non-discriminatory, and adequately protect consumers. Insurers must justify their rates (using actuarially supported data).
  • Rolling the cost of loan policies into the mortgage would decrease transparency into loan closing costs that the CFPB desires.

The ALTA update concluded with three ways that title industry professionals can oppose the program, thus protecting homeowner and lender property rights.

  1. ALTA members are encouraged to register for the ALTA Advocacy Summit, May 6-8, 2024, in Washington, DC, to make your voices heard on Capitol Hill.
  2. Join ALTA’s Title Action Network (TAN) to help advance the Protecting America’s Property Rights Act.

  3. Help advocacy efforts by sharing information about issues or claims involved in refinances and why title insurance is important with

For more information about the ALTA’s position on unregulated title insurance products, click here.