Fannie Mae To Expand Title Pilot Program, Pulte Says

Fannie Mae will soon announce initiatives to expand its title waiver pilot program, Federal Housing Finance Agency (FHFA) Director Bill Pulte said Tuesday.

The program, announced by President Joe Biden during his March 2024 State of the Union address, aimed at reducing closing costs as part of a broader “war on junk fees.” It allows approved lenders to use automated title review processes during loan manufacturing and prior to loan purchase.

Currently, the program is limited to certain refinance loans with loan-to-value ratios of less than 80% in specific geographic areas.

“Fannie Mae is working actively to expand its title pilot program, especially on title insurance for home refinancings,” Pulte wrote in an X post on Tuesday. “As long as it is safe and sound, our team is pushing for efficiencies and lower costs in title insurance.”

Pulte also posted that Freddie Mac is “hyper focused on reducing costs up and down the home closing chain.”

Top U.S. lenders, including United Wholesale Mortgage (UWM) and Better, joined the program in late 2024, paving the way for other companies to follow.

However, analysts at Keefe, Bruyette and Woods (KBW) noted on Wednesday morning that the initiative’s impact has been limited so far.

“The title pilot remains very small, and it is only for refinances, which account for under 10% of revenues,” the KBW analysts wrote. “So, we don’t think an expansion of the program will be meaningful to title insurance earnings.”

The program faced headwinds in its inception. The title industry, rejecting the “junk fees” label, argued that the waiver introduces unnecessary risk to the housing market. Industry advocates hoped the Trump administration would halt its advancement, and a bipartisan group of lawmakers previously urged the FHFA to pause the program until it could undergo a more thorough public review.

Doma and Westcor Land Title Insurance Co. serve as the title vendor partners for the pilot. In April, Opendoor agreed to acquire the closing and escrow operations of Doma Holdings. If approved, the acquisition will feature a three-way partnership involving Opendoor, Doma and Fannie Mae to further support the program.