Fannie Mae title pilot can save homeowners up to $1,692 per refi
The pilot program is scheduled to run through May of 2026. Under the program, Fannie Mae may accept the results of an automated title review in lieu of traditional title insurance on refinance transactions in limited circumstances.
According to the release, Nigrinis and Zywicki analyzed how much widespread use of automated title risk assessments would reduce consumer costs, promote greater transparency and increase competition in the industry.
They say their findings are based on expectations that “there will be an immediate savings benefit for consumers who take advantage of the program, there will be a market advantage because title insurers will lower their prices by approximately 10%, and there will be a competitive advantage because approximately 10% of consumers who would be customers of the entrenched incumbents are switching to an automated review. ”
The report found that the state that could experience the most savings per transaction would be Texas with savings of $1,692 per loan, followed by Florida ($1,275 per loan) and New Mexico ($978 per loan). The authors also believe that the pilot could generate increased title insurance competition, which they believe would benefit Solo female homeowners, Hispanic, Black, AAPI homeowners, homeowners 55 and older, and non-metropolitan homeowners.
“In short, our analysis shows that Fannie Mae’s title insurance pilot will have a profound and long-lasting impact on closing costs, potentially eliminating a barrier that prevents many homeowners from pursuing a refinance or other financially beneficial transaction. It is clear that this program must continue and expand,” a summary of the study states.
State Advocates General and the American Land Title Association (Alta) have pushed back against the pilot program because they believe it will “shift the title risk on refinanced loans purchased by Fannie Mae from state-regulated title insurance companies to Fannie Mae itself,” according to a letter sent by 14 attorneys general in July to FHFA Director Sandra Thompson.
