Rate has launched a pilot in which it will use automated analyses of loan data to determine whether certain refinances can be originated without a lender's title insurance policy.

The EnTitled program, available in 23 states, appears to be in line with Fannie Mae's test of insurance waivers. Refinance loans in the program must meet government-sponsored enterprise eligibility requirements, according to Rola Gurrieri, chief fulfillment officer.

"The program is designed to help borrowers save money and move through the refinancing process faster by using data and automation to assess title-related risk," Gurrieri said in an email sent in response to an inquiry from this publication. 

The resulting savings could be as high as $2,000 in states like New Jersey, according to Gurrieri. 

"At the end of the day, refinancing your mortgage has to make financial sense for the customer. If we can use technology to remove a cost borrowers don't need to pay, we should," said Victor Ciardelli, president and CEO of Rate, in a press release. 

Fannie's test has allowed for waivers of both lender title policies and attorney opinion letters for certain refinances with loan-to-value ratios below 80% in its pilot, which is set to run through November 2027. The GSE had not responded to an inquiry about Rate's participation at deadline.

Fidelity National Financial recently renewed its opposition to Fannie's effort to test title insurance waivers in an interview with National Mortgage News staff, but also noted that it is always open to helping pilot other alternatives so long as it doesn't mean dispensing with coverage altogether.

"It's never a good idea to waive title insurance. You may save a small fee upfront, but you introduce significantly more risk in return," said Brian Maughan, Chief Innovation Officer at Fidelity National Financial.

Borrowers can still elect to get their own title insurance in Rate's program.

A broader view of title alternatives

FNF has also been opposed to some other title alternatives such as attorney opinion letters, asserting that while proponents have argued that AOLs involve other types of coverage like errors and omissions, they are unregulated, don't carry sufficient long-term protection and often don't provide any documented savings, according to Maughan.

Fannie's test of title waivers previously received some pushback from a group of legislators during the Biden administration, who called for it to be put on hold until more extensive vetting could occur. While the pilot experienced some interruptions, it ultimately moved forward.

Bill Pulte, director of Fannie's oversight agency during the Trump administration, expanded the government-sponsored enterprise's title waiver pilot with a second vendor last year in line with broader efficiency and affordable housing initiatives.

FNF is open to collaborating with lenders and other market participants to explore alternative approaches that could achieve efficiency gains while continuing to protect lenders and consumers from the consequences of a title defect, according to Maughan.

"If the goal is to make refinances faster, we can move as fast as lenders and GSEs want. We have the processes and technology in place today to make a 7-day refi a reality — right now. The efficiency is there. What we won't do is trade that speed for less protection," Maughan said.