ALTA Responds to CFPB on Mortgage Closing Costs

WASHINGTON, May 30, 2024 /PRNewswire/ -- The American Land Title Association (ALTA), the national trade association of the land title insurance industry, along with our members in every county across the United States, look forward to participating in the request for information (RFI) announced today by the Consumer Financial Protection Bureau (CFPB). We appreciate the opportunity to educate federal agencies as to how the title insurance market works and collaborate with policymakers on thoughtful approaches to the important issue of housing affordability.

The services provided by title professionals and the ongoing protection of a title insurance policy are some of the most essential, but least expensive, parts of the homebuying process. In fact, in a period of increased inflation, thanks to industry innovation, the cost of title insurance coverage has decreased 5% over the last five years alone.

Importantly, fees for title insurance and other closing costs must be provided and disclosed to consumers under a federally mandated rule that the CFPB itself developed in 2015. Lumping title insurance and settlement services into the category of "junk fees" conflicts with the White House's own definition, which cites the lack of disclosure of the fee being charged. CFPB's own research from as recently as 2020 shows these disclosures are working to educate consumers about closing costs. The CFPB report praised its own rule for improving "consumers' ability to locate key information, compare terms and costs between initial disclosures and final disclosures, and compare terms and costs across mortgage offers."

Our products are comprehensively regulated at the state level by departments of insurance, and title insurance companies are required to file their policies and rates with state regulators to ensure they are fair, non-discriminatory, and adequately protect consumers -- with rates justified using actuarially supported data. The title industry does more than just issue an insurance policy, performing vital work to cure defects in the chain of title, including unpaid taxes, child support and other liens, as well as combating >>fraud