Garbarino, Gonzales Introduce The Protecting America's Property Rights Act

WASHINGTON, D.C. - Congressman Andrew R. Garbarino (R-NY-02) and Congressman Vincente Gonzales (D-TX-34) recently introduced the Protecting America’s Property Rights Act. This bill wouldamend the Fannie Mae and Freddie Mac charter acts to clarify that title insurance protecting the lien priority is required for a loan to be a conventional mortgage and thus eligible for sale to the Enterprises. The bill also requires that prior to the Enterprises offering a new business, product, or activity, they must seek the approval of FHFA and Congress.

Earlier this year, in March, it was reported that Fannie Mae was considering a pilot program that would waive title insurance requirements for certain lenders, constituting a major departure from current policies. In waiving these requirements, this pilot program would turn Fannie Mae into a de facto title insurer, with the GSE becoming responsible for handling claims if a title-related issue is discovered. While the intent of the potential pilot program is to promote affordable and sustainable housing opportunities for more households nationwide, this move is only putting the lender at risk.

"Title insurance agents work every day to educate consumers about their options to protect their property rights and investment in their home. Removing title agents from the closing process could leave consumers at risk, as they may not receive the proper education or options about protecting themselves," said Rep. Garbarino."This legislation would protect consumers and ensure that Fannie Mae and Freddie Mac remain vigilant in their chartered mission of ensuring stability and liquidity in the secondary mortgage market, not expanding their business to self-insure the loans they purchase and taking on unnecessary risk."

“At a time when mortgage rates and borrowing costs continue to rise, making homeownership a distant thought for some, prospective homeowners shouldn’t bear the brunt of additional costs such as the title defects on a property,”said Rep. Gonzalez.“This bipartisan bill would ensure folks who use government-backed mortgages, like veterans or low-income homebuyers, are protected from unforeseen risk and high legal fees.”

"We thank Representatives Garbarino and Gonzalez for their bipartisan leadership in introducing the Protecting America’s Property Rights Act. They know the vital role that title insurance professionals play in protecting consumers and lenders and ensuring the integrity of property rights nationwide. The American Land Title Association looks forward to continuing to work with Congress to enact this legislation and promote homeownership opportunities for all Americans," said The American Land Title Association.

The full text of the bill can be found here.

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