fannie mae caused some stir last week when he announced that he would accept written letters of opinion from lawyers instead of a title insurance policy “in limited circumstances”.
HousingWire wondered: what were those limited circumstances?
According to the government-sponsored entity, the only proceedings ineligible for a law degree opinion letter are those involving loans secured by a unit in a condominium project, shared loans from cooperatives, loans secured by a home in a leasehold property, including leasehold property owned by a community land trust, loans secured by a home Manufactured, HomeStyle Home Style and Energy Renovation Loans, Texas Section 50(a)(6) Loans, Loans Secured by Property Subject to Restrictive Agreements or Restrictive Covenants, and Loans Executed by Power of Attorney.
“This update aligns with industry policy and provides lenders with an option, typically used for refinancing transactions,” Fannie Mae wrote in response to HousingWire’s query.
In May 2020, freddy mac Announced would be accepting attorney opinion letters in lieu of title insurance policies in similar circumstances and with similar requirements for the letter and the attorney writing it.
In an email, Fannie Mae confirmed that the impetus for this change was that the use of AOL could potentially lower title costs for borrowers. GSE plans to track AOL’s results to better understand the savings achieved.