VIEWPOINT | White House's insurance waiver program would pain South Dakotans

Guest column by Travis Martin, South Dakota Land Title Association.

During the State of the Union, President Biden announced an array of proposals aimed at making homeownership more accessible for those who have struggled to enter the housing market. While the Administration’s efforts to expand homeownership are admirable, one program in particular — waiving title insurance requirements on refinancing transactions for certain borrowers — would be disastrous for South Dakota homeowners and the broader housing finance system. 

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This pilot program would resurrect a proposal by Fannie Mae that was abandoned last August after bipartisan backlash from members of Congress, who voiced concerns over how the program would expose lenders and taxpayers to greater risk. Instead of being insured by their local title insurance company, Fannie Mae — which is under federal government control for its role in the 2008 financial crisis — would essentially become a title insurance company, displacing the expertise and jobs of small title companies in every county in the state. Importantly, this pilot program only applies to higher-wealth homeowners that are refinancing, not specifically targeted to particular borrowers in-need such as veterans. Why would the Biden Administration promote such a program — especially one that would hurt the small businesses that make up 90 percent of the title insurance industry?