In a recent move, a proposal under the Biden administration aimed at reducing closing costs for certain homeowners has been halted. The proposed plan could have resulted in savings of thousands of dollars for homeowners, but opposition from the industry and lawmakers has led to its discontinuation.
What Happened: According to The Wall Street Journal, Fannie Mae (OTC:FNMA), a government-run mortgage giant, was set to finalize a program this summer that would have nullified the need for title insurance, a major fixed cost in mortgage closing.
The proposed scheme had plans for Fannie Mae to bear the costs of title insurance for a handful of mortgage refinancings provided by seven or eight lenders. The program had the potential for future expansion to incorporate more lenders and various mortgage types.
See Also: What Is Title Insurance? How Does It Work?
However, the proposal faced significant criticism, mainly from the title and settlement industry, arguing that Fannie Mae did not possess title insurance experience and did not need ...