NASHVILLE – Tennessee Attorney General Jonathan Skrmetti has led a coalition of state attorneys general in sending a letter to the Federal Housing Finance Agency (FHFA), expressing concerns about a revived pilot program that removes title insurance requirements from certain loans sold to Fannie Mae.
The program, initially proposed by the Biden Administration, faced significant opposition from Congress and industry experts. Though it was abandoned last year, the FHFA has reintroduced a similar initiative, prompting concerns about potential fraud and consumer harm.
Latest TN News
“The affordable housing crisis demands meaningful bipartisan solutions, not shortsighted regulatory overreach,” stated Attorney General Skrmetti.
In the letter, Skrmetti highlighted the importance of title insurance in protecting homeowners from fraud and exploitation. He argued that, contrary to the FHFA’s claims, the cost of title insurance is modest and provides critical protection against significant financial risks.
The attorneys general presented several reasons for terminating the revised pilot program. They noted that the FHFA approved the program without public input, violating its own rules to determine if it serves the public interest. The program only benefits homeowners with “lower risk” refinance loans, ignoring the needs of first-time and low-income buyers. Moreover, it fails to address other barriers such as high interest rates and limited affordable housing.
The program also exposes homeowners to possible fraud and abuse, removes protections from liens and alternative claims of ownership, and forces them into an experimental claims resolution process with Fannie Mae, risking property sale or foreclosure. Additionally, it threatens local economies by allowing Fannie Mae to bypass small businesses in communities.
Alongside Tennessee, the states of Alabama, Arkansas, Georgia, Indiana, Kansas, Louisiana, Mississippi, New Hampshire, Oklahoma, South Carolina, South Dakota, Texas, and Virginia have joined in signing the letter.
You can read the letter in its entirety here.
Source: Read Original Release