April 12, 2024

CFPB May Consider Ban on Charging Buyers for Lender’s Title Policy

 Charging home buyers for title insurance is a long-standing industry practice intended to protect lenders. A Bloomberg report initially broke that the CFPB will soon issue a broad request for information on closing costs – including title insurance.

The CFPB’s plan is still in its initial stages.

Reportedly, the proposed changes could include the radical change of preventing lenders from charging borrowers for the cost of lender’s title insurance. Per the Bloomberg report, the plan would only impact lenders’ insurance – buyers could still purchase optional title insurance to cover their equity.

The CFPB declined to comment on a specific proposal 

Statement from CFPB spokeperson:
“The CFPB is looking carefully at closing costs and fees consumers may encounter throughout the mortgage process. We are working with agencies across the government to foster greater competition in the mortgage market and help Americans save money when purchasing or refinancing a home.”
Read more on this breaking news »

TLTA will keep you updated on this and other related federal issues

As we've been reporting, CFPB has been engaged in an initiative to study "Junk Fees" for many months. Last week in Dateline we shared this news, which details the ways in which this CFPB initiative relates to mortgage closing costs.
If you want to take a deeper dive into this subject, TLTA built a special page where we are collecting information related to this issue: CFPB “Junk Fee” Initiative.
Related Federal Developments
This is one of several interrelated federal initiatives affecting our industry, so it is important to stay informed on all of them. In case you missed it, there's a page on TLTA's site dedicated to news, Congressional response and background info related to the FHFA: Fannnie/Freddie Title Insurance Waiver Pilot Project that was announced during the State of the Union address last month.
If you have questions, please send them to Aaron Day or call Aaron at 512.810.8800, thank you.