Misguided Attacks On Title Insurance Could Have Grave Consequences

In the last couple of years Fannie Mae
and its government overseer, the Federal Housing Finance Agency have taken aim at the title insurance industry – an often overlooked but important part of the housing finance infrastructure that protects homeowners from possible issues regarding the provenance of the title of any home they are attempting to purchase.

For instance, Fannie Mae’s recently-scrapped title waiver pilot program – which would have resulted in the GSE taking on an altogether new role in the primary market with which it has no experience nor authority – and recent expanded acceptance of unregulated attorney opinion letters in lieu of title insurance on certain loans are evidence of the reality that government regulators have gaping misconceptions about what title insurance entails and the risks involved with alternatives.

These attempts to sidestep title insurance is a mistake, and any ostensible cost savings would likely be outweighed by the lack of coverage and uncertainty these efforts would create in the real estate market.

Title insurance is fundamentally different from property and casualty insurance or other insurance products, where most of the upfront cost is marketing. Title companies incur significant upfront expenses related to conducting public records searches and rectifying any problems found before the buyer closes on the home. For a one-time fee that typically costs the borrower approximately 0.5% of the home’s purchase price, less than most all other fees involved in the mortgage process over the life of a loan, title insurance companies ensure clear property ownership rights for home buyers and provide comprehensive coverage if a problem arises.

Title insurance rates are regulated at the state level, and due to significant fixed costs to produce a title policy, the industry’s profit margins are much lower than other lines of insurance. The National

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Supporters of mine near Okefenokee hint at lawsuit if Georgia lawmakers pass bill protecting swamp

Supporters of a plan to mine Trail Ridge near the Okefenokee Swamp say the local community sorely needs the economic boost. Defenders of the swamp argue it isn’t worth the risk.

The two sides battling in the nearly four-year saga over whether an Alabama company should be allowed to move forward with its plans to mine the site for titanium dioxide and zirconium were allowed to make their case to lawmakers during a two-hour public hearing held Tuesday. 

The hearing was on a bill sponsored by Thomasville Republican Rep. Darlene Taylor that would block future mining proposals at Trail Ridge near the largest blackwater swamp in North America.

But the focus turned often to Twin Pines Minerals’ pending permit application, with a company representative saying Taylor’s bill would stop the company from expanding or modifying the permit later.

The state Environmental Protection Division is accepting public comment on a key part of the proposal through next Monday. The demonstration mining project would take place along 580 acres that is located nearly three miles from the edge of the refuge.

“Any blanket prohibition of mining on Trail Ridge like those contained in HB 71 is a policy question left to the General Assembly,” EPD Director Rick Dunn said to lawmakers Tuesday.

Rep. Lynn Smith, a Newnan Republican who chairs the House Natural Resources and Environment Committee, listens to the public comments on a bill that would ban future mining applications on Trail Ridge near the Okefenokee Swamp. Jill Nolin/Georgia Recorder

The bill is not scheduled for a vote this session, which ends March 29, and has already missed a key legislative deadline for a measure to clear at least one chamber to have a smooth path to the governor’s desk this year. But it does remain alive for next year.


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