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The New Administration to Scrap the Biden Title Insurance Requirements

KEY ISSUES

• Biden initiative to reduce the cost of buying a home was a partial solution
• Only targeted specific government backed loans
• American Land Title Association was hesitant when originally announced
• New cabinet announcements will swing the momentum away from the previous program

At the beginning of 2025 it is predicted that President-elect Trump will be planning to axe the previous administrative plans to remove title insurance from the requirements of lenders for specific loans.

As everyone knows, March 2024, President Biden announced that the Federal Housing Financing Agency previously gave the green light for new policies and plans to reduce closing costs for homeowners, in theory by waiving the requirements for lender’s title insurance for certain refinances. The White House estimated a meager max $1500, and average of $750, lowering of upfront savings as rates fall.

New Direction

In building his administration before the inauguration on January 20^th, it was mentioned that the Biden administration’s plan would only assist a small percentage of transactions. The plan specifically targeted only the government backed mortgages such as Fannie Mae, and only qualify if it was considered a ‘low risk’ refinance transactions. Some were curious if the Biden administration’s plan was a good idea overall? The American Land Title Association (ALTA) specifically spoke to this point in mentioning that it was “purely a political gesture and offered a false sense of security in saving homeowner’s money.” With the program only targeting considerably more wealthy homeowners with a good amount of equity in their homes. More in, that the policy would not actually create a significant impact in the affordability in homeownership opportunities ().

Trump had apparently been opposing this plan from the beginning. When overhauling the regulatory agencies, Trump included those that directly affected the mortgage industry. The Federal Housing Finance Agency (FHFA) at first endorsed the program set in motion by the Biden administration, with significant personnel changes will be taking place and as such the endorsement behind the program. In being extremely difficult, if mortgage rates can be lowered, like the last Trump term, it should help to offset closing costs and hopefully improve the housing affordability over time. With the free market approach to housing, regulation is needed with little competition. But, opposite there is a high competition level within the insurance space. Trump has mentioned he can implement changes positively impacting the potential homeowners, rather than the lenders. Maybe even lenders will be covering the cost of title insurance premiums, rather than the buyer.

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