Americans frequently place house prices at the top of their lists of concerns when elections roll around. A new poll by the Hispanic Leadership Fund found that voters overwhelmingly want to kill fees associated with refinancing a mortgage.
The poll, which the Washington Examiner can exclusively report, finds that 90% of voters support reducing title insurance fees and 89% will vote for a candidate who supports cutting the red tape.
The Hispanic Leadership Fund, a public policy advocacy group, conducted the poll after the Biden administration implemented a pilot program through the government-backed secondary mortgage backer Fannie Mae that reduces refinancing fees for some homeowners.
Now, the Federal Housing Finance Agency, which operates Fannie Mae, under the directorship of Bill Pulte, is looking to continue the program. Before this pilot program was introduced, homeowners could expect to pay a fee of up to $2,000 for title insurance every time they refinanced their home.
In an interview with the Washington Examiner, Hispanic Leadership Fund President Mario Lopez praised the pilot program and voiced what 90% of participants in the group’s poll believe about refinancing fees.
“When affordability is such a big thing — when housing availability is such a huge element in voters’ minds — we think this is just a really simple way to cut down on these unnecessary costs and make refinancing more accessible for more Americans,” Lopez said to the Washington Examiner.
After the federal government began a reduced-fee pilot program, lenders could expect to pay as little as a $75 administrative fee only for title verification instead of the larger fee of $300 to $2,000 for title insurance — savings that get passed on to the homeowner. The larger fee is reportedly used in records searches and administrative work, while this reduced fee is only used for the automated operating costs of determining if the applicant is a “low-risk” individual.
This data, collected by the HLF, also found that voters would overwhelmingly support a candidate who runs on a promise to cut refinancing fees. Nearly 9 in 10 voters replied that they are “somewhat likely” or “much more likely” to support a prospective representative committed to expanding the type of program Fannie Mae is currently testing.
While the HLF’s data shows vast support among a dataset of over 1,000 registered voters, opposition to Fannie Mae’s pilot program comes from industry professionals who warn against the cost-cutting measure.
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The American Land Title Association, which sets industry standards for a majority of the secondary title insurance market, expressed concerns that the pilot program sounds good for consumers, but stiffs lenders who take on unnecessary risks when refinancing without insurance.
“Research shows fraud and forgery account for approximately 40% of title claim costs associated with refinance transactions, with the average refinance fraud and forgery claim costing more than $206,000 — a cost that most homeowners cannot absorb on their own,” ALTA said to the Scotsman Guide, a news organization that focuses on the housing industry.
Among other arguments, opponents of the program in the title insurance industry say that it reduces safety requirements in a possibly volatile field. If homeowners do not have to pay for title insurance every time they refinance their homes, it leaves a possibility for fraud to slip through and hurt both the refinancer and the homeowners, the opposition says.
“We can be sure there may be some very limited instances where [title insurance for refinanced houses] is necessary … but for the vast majority of people, that is not the case, and so there’s just no reason to make them pay extra money for something that is wholly unnecessary,” Lopez said.
Lopez argued that requiring title insurance every time a homeowner refinances their house, even if they are low-risk individuals, imposes a strict and unnecessary fee on homeowners.
Pulte, director of the FHFA and President Donald Trump’s appointee to oversee the country’s national intelligence apparatus, recently said that Fannie Mae would be looking into expanding the pilot program.
“Fannie Mae is working actively to expand its title pilot program, especially on title insurance for home refinancings,” Pulte said in a post on X. “As long as it is safe and sound, our team is pushing for efficiencies and lower costs in title insurance. Announcements coming soon from the Fannie Team!”
According to the data from the HLF, voters across all parties and age demographics predominantly support expanding the cuts to the title insurance requirement that Pulte is pursuing.
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Lopez told the Washington Examiner, “The need to pay for something that you already paid for, especially when nothing of significance has changed in terms of the title, and that’s true for the sizable majority of homeowners.”
Voters agree that reforming the housing market, which has long been dominated by overwhelming fees and costs, is in need of reform. Fannie Mae’s pilot program is a step in the right direction to reduce costs for refinancing homes as America grasps at solutions to the housing supply crisis.
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[ H/T Washington Examiner ]
