FHFA Launches Title Acceptance Pilot Program to Reduce Closing Costs
On March 7, 2024 the Federal Housing Finance Agency (FHFA) announced a pilot program for automated title acceptance. The limited duration program is eligible in certain geographies on refinance transactions with 80% or less LTV%. The program enables borrowers to save anywhere from $300 to $1500 in closing costs.
Lenders are required to warrant that the mortgage is a valid first lien that is free of any prior lien or encumbrance in order to sell the mortgage to Fannie Mae or Freddie Mac.
Lenders are responsible for making sure title requirements are met, and lenders must provide independent verification through either a lender’s title insurance policy or attorney opinion letter (AOL). The title does not impact the homeowner’s title risk, since the existing homeowner continues to hold title.
