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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Which candidate for attorney general will stick up for the public’s right to know?

Jonathan Anderson

Jonathan Anderson

Josh Kaul and Eric Toney are miles apart on many issues. But when it comes to open government, the candidates vying for Wisconsin attorney general in the Nov. 8 election agree: More money is needed to handle enforcement of the state’s transparency laws.

The Wisconsin Freedom of Information Council sent questionnaires to Kaul, the Democratic incumbent, and his Republican challenger, Fond du Lac County District Attorney Eric Toney.

The state Department of Justice, which the attorney general heads, is empowered by statute to interpret and enforce Wisconsin’s public records and open meetings laws. The department’s Office of Open Government handles that job, in addition to responding to public records requests.

In assessing the office’s strengths and weaknesses, both candidates mentioned the office’s processing times for handling public records requests and responding to inquiries. Toney said the office is not prioritized and that DOJ’s response times to public records requests have increased sharply during Kaul’s tenure.

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Both candidates cited the need for more funding. Toney wrote that he would “apply sufficient resources and prioritize the proper administration and enforcement of these laws.” He criticized Kaul for not updating advice online since May 2021, and for posting few responses to public records requests on the DOJ website.

Kaul said the Office of Open Government “does an excellent job with the limited resources available,” but that more resources would allow it to respond more quickly. He highlighted the office’s efforts to provide guidance on open meetings law challenges during the early days of the pandemic and for parsing the effects of Marsy’s Law on public records access.

The candidates also commented on two recent state Supreme Court decisions involving the public records law.

In the first case, Friends of Frame Park v. City of Waukesha, the

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