UWM’s program, known as TRAC Lite, has expanded to 14 states: Arizona, California, Colorado, Illinois, Indiana, Kentucky, Maryland, Minnesota, Nevada, New Jersey, Ohio, Tennessee, Texas, and Virginia, according to UWM Chief Operating Officer Melinda Wilner.
“The primary benefit is the substantial savings passed on to consumers,” Wilner said. “The savings to borrowers are incredible. Looking at the savings that we’re enjoying in these states that is going into consumers’ pockets instead of the title companies’ pockets is pretty astounding.
“On average, borrowers save more than $1,000 per transaction, with some states seeing even greater reductions. You take a state like Texas that has very, very expensive title premiums relative to the rest of the country, and the savings there are even greater. Those are probably pushing a couple of thousand dollars almost.”
Better CEO Vishal Garg reported similar results, with customers seeing roughly $1,500 in average savings per transaction. His company’s title waiver pilot now operates in Arizona, California, New Jersey, Texas, Colorado, Ohio and Virginia.
“That ($1,500) is on the refi side, and we think on the purchase side, it would be more like $2,500 to $3,000,” he said. “Purchase title insurance is more expensive than refinance title insurance, but like they’re basically serving the same purpose. We have seven states down and 43 to go.
“As refi gets ramped back up, and consumers are doing more cash out refis — with what’s happening with the economy, with the amount of money that they’re sitting on in home equity — I think we’re going to see some real savings materialized for the consumer.”
Both companies’ pilots were announced late last year in partnership with Doma, allowing lenders to waive title insurance requirements for certain mortgage refinances.
The pilot program is exploring whether automated title reviews can effectively replace title insurance or attorney opinion letters (AOL) for “low-risk refinance transactions” where there is high confidence the property has no outstanding liens or encumbrances.
Innovation in the age of AI
Wilner acknowledged that the title insurance industry has not been supportive of TRAC Lite.
“When I think about the agendas, and the FHFA, and about (TRAC Lite), it’s just such a no-brainer win for consumers,” Wilner said. “I just can’t imagine anyone taking it away. I just love seeing consumers come out on top. And it’s such a great like, frictionless product. Doma is doing such a great job that it’s a win for everyone all around.”
Garg said efforts to stop title waiver pilots and similar programs are examples of fighting the inevitable.
“I think the age of AI is here. There really is no point in fighting it,” he said. “The best thing to do is to adopt it, embrace it, and deliver the savings to the consumer that the consumer is looking for. Figure out how to rearrange your business so that you can be competitive with the new status quo.”
Some industry insiders speculated that Title Resources Group’s acquisition of Doma in September 2024 might affect title waiver pilot operations. However, both Garg and Wilner dismissed those concerns.
“I think the rollout was after that acquisition,” she said. “We have felt nothing from it on our end.”
“(Doma) is leaning (into the pilot program) as hard as ever,” Garg responded.
While Better’s and UWM’s programs are currently limited to refinance transactions, both Wilner and Garg expressed interest in expansion to include purchase transactions, though they acknowledged the challenges.
“No one has ever talked about, ‘Hey, does this turn into purchases at some point? Does it turn into even more states?’” she said. “It would be nice. There’s certainly far more money on the owner’s policy side of things.”
Ultimately, that decision to expand rests with Fannie Mae.
“I think that would be huge,” said Garg. “The purchase mortgage market is almost 75% of the mortgage market today and title insurance policies can take anywhere from nine to 15 days to come through. That’s pretty significant when you think about the days to closing. That’s more time that something can go wrong during the closing process. That’s more time that the consumer has uncertainty about whether they’re going to be able to get the loan to buy the home that they want to buy. That’s more time just in terms of costs.”
Fannie Mae did not immediately respond to a request for comment.
Title industry reaction to Fannie Mae pilot
In April 2022, Fannie Mae revised its Selling Guide, granting lenders the flexibility to choose between a lender title insurance policy or, in specific cases, an AOL. A subsequent update in 2023 broadened the scope of AOL eligibility, extending it to condominiums and properties governed by restrictive covenants, such as those within homeowners’ associations and planned unit developments.
Meanwhile, a coalition of U.S. House representatives, spearheaded by members of the Congressional Real Estate Caucus, has urged the Federal Housing Finance Agency (FHFA) to pause the pilot program until it undergoes a comprehensive review and includes public input.
“This ill-informed pilot was part of the Biden Administration’s overreach, and places financial risk currently shouldered by state-regulated, private-market title insurance companies onto Fannie Mae, and ultimately, taxpayers,” the American Land Title Association (ALTA) stated. “The program runs counter to the ongoing efforts to reform the federal bureaucracy and ensure taxpayers are protected, while also representing a significant federal intrusion into the comprehensive state oversight of insurance.
ALTA also referenced a recent letter written by U.S. Sen. Tim Scott (R-S.C.), chair of the Senate Banking Committee, to former FHFA Director Sandra Thompson sharing his concerns about the pilot program, as well as stated criticisms from state attorneys general and state lawmakers.
“No one should be fooled by exaggerated claims of cost savings,” ALTA said. “Proponents of the pilot continue to mislead about the program’s efficacy while minimizing the risk it poses to homeowners and lenders. It should be terminated as policymakers have called for.”
The pilot’s future under the new administration
With the return of Trump to the White House, questions have arisen about the longevity of the title waiver pilot program. Wilner expressed confidence that the program would remain intact.
“I would say with 99.9% certainty that I don’t believe it’s going away,” she said. “This product is so hard to argue any downside about. What would be the justification for taking it away?”
She pointed out that the program aligns with broader efforts to make mortgages more affordable.
“I think the administration will continue to focus on things that they can make better for consumers, whether it’s inflation or whatever,” she said. “But the thought of, ‘Hey, let’s try and make mortgages innovative, competitive, and continue to drive costs down,’ I do think that will continue with the new administration.”
Garg also feels that a full cancellation of the pilot program under the Trump administration is highly unlikely.
“I think the title program would likely expand, because we’re talking about the most AI-friendly administration in history and the most focused administration in driving savings to Americans, American families and American homeowners,” he said. “If you think about the title insurance pilot, it hits the concentric circles of AI adoption and savings for American families. It hits them quite perfectly. It’s $1,500 or more of savings and that’s after tax.”
Cost-cutting suggestions
If the pilot program were to be discontinued, Wilner believes the title insurance industry would need to take proactive steps to address affordability concerns.
“I would say the reason that Fannie and Freddie likely opened up attorney opinion letters in the first place, and things like this title alternative, like the title waiver, is to drive costs down,” she said. ” Companies should do more analytics like the state of Texas did and truly look and see if you can have your premiums lower,” she said. “Their claims rate is 3% to 4%, and people raise eyebrows and say, ‘Hey, are these premiums really too high given the level of risk?’ And a lot of people have decided that, yeah, they really are too high.”
Automation will continue to play a key role in driving down the costs of title and closing services, Garg said.
“There’s so much work in the title process that an AI agent can take over a lot of manual key entry, a lot of looking through reams of documents to find a kernel of information,” he said. “All of those tasks are perfect for AI agents to automate and make instant and that, I think, can dramatically reduce the cost structure of the title industry, and allow them to operate at what will be the new expectations for price from consumers going forward.”
Fees for borrowers that go beyond the title insurance premium were also cited by Wilner.
“The amount of fees and the variation, that’s the part that actually nobody has really focused on,” she said. “They’ve been focusing a lot on the premium, but there’s also a ton of savings on the non-title insurance portion. For me, it’s like, ‘Hey, whatever is best for the consumer.’ That’s why we believe in options for everything.”
