Why ALTA Fears Title Insurance Alternative Use Could Go Too Far

Source: National Mortgage News

As more large players like United Wholesale Mortgage and the government-sponsored enterprises launch efforts aimed at reducing title insurance costs, a trade group has issued new warnings about the potential risks.

The American Land Title Association — whose market share could be reduced by the increased use of alternatives to traditional coverage — asks whether the closing cost savings available to borrowers outweigh a potential increase in risk that ownership rights on mortgaged homes could be forfeited.

"The reality is you might be saving them a few bucks on the front end, and costing them a lot more on the back end," said Steve Gottheim, general counsel of the American Land Title Association.