ALTA Threatens Cancellation of Title Agent’s Membership for Providing Title Alternative

Proposed ALTA Charter to Prohibit Lower Prices and Consumer Choice

Opinion Editorial By Theodore Sprink, Founder and CEO of iTitleTransfer, LLC

On July 21st the American Land Title Association (ALTA) convened its “Large Title Insurance Agents Conference” in Deer Valley, Utah.  ALTA announced its intention to change its charter to prohibit member title agencies from utilizing, offering, promoting, marketing, recommending or distributing any and all alternatives to title insurance. 

Representatives of ALTA spoke against alternatives to title insurance, falsely claiming “AOLs” as uninsured, and directed title agents to criticize title insurance alternatives.  ALTA representatives also targeted the “Refinance Title Insurance Waiver Program” recently introduced by FHFA, Fannie Mae and Freddie Mac, for the purpose of reducing low-risk refinance closing costs, for the benefit of minority and first-time homebuyers, representing 40% of the real estate market.   

The implication for title insurance agencies is that “cost” of membership de-certification prohibits the title insurance agent’s ability to underwrite and issue core “ALTA-approved” title insurance policies and endorsements, effectively putting the title agents out of business.  Borrowers are also adversely affected by anti-competitive pricing and the absence of choice.

Alternatives to title insurance were authorized by Fannie Mae and Freddie Mac, under the authority of FHFA for the purpose of providing borrowers a low-cost choice to costly and often-unnecessary title insurance. 

This authorization was established in the GSE’s “Bank Seller Guide” and subsequently restated in the GSE’s “Equitable Housing Finance Program”.  Collectively, the two GSEs, represent 85% of the mortgage loan secondary market, and set national guidelines for their annual purchase of $3.0 Trillion in mortgage loans from 3,000 Seller-Bank loan originators.

As most real estate industry professionals know, the market has developed innovative, fully insured, low-cost, competitive, consumer choice-based alternatives to title insurance, for substantially less than the cost of traditional settlement services.

Ted Sprink, Founder and CEO of Scottsdale, Arizona-based PropTech firm iTitleTransfer, LLC developed a GSE-authorized, fully insured, E2E, loan closing platform serving as an alternative to title insurance, for one-third the cost of traditional settlement services.  According to Sprink, “most importantly, iTitleTransfer’s GSE-authorized platform provides consumers a choice in selecting closing services in a real estate environment, where choice has never been available to consumers”.

Sprink described iTitleTransfer’s platform as serving title agents, lenders, loan brokers and Realtors in fulfilling their fiduciary responsibility to educate and inform borrowers of a closing option to save thousands of dollars.  Platform lender, borrower and investor protection focuses on fraud, forgery, lien priority, duty to defend, curative, CPL escrow, gap, and cyber with multiple layers of AM Best rated insurance companies providing broad, comprehensive and transactional insurance coverage.

Sprink believes “ALTA’s ongoing disinformation campaign, intended to monopolize the loan closing market, has adversely affected industry education, and undermined the fiduciary responsibility of title agents, lenders, loan brokers and Realtors to properly inform borrowers of the availability and benefits of loan amount, life-of-loan, low-cost, fully insured loan closing alternatives, authorized by GSEs in April 2022.

As stated by Sprink “ALTA’s Deer Valley conference statements appear to fly in the face of the Consumer Finance Protection Bureau (CFPB) and Department of Justice (DOJ), who are currently investigating the title industry for anti-competitive and monopolistic business practices, and its excessive use of junk fees”.  The author can be contacted at tsprink@ititletransfer.com and 866-494-3727.   www.iTitleTransfer.com.