Congress Is Debating Who Bears the Risk When Your Title Has a Problem

A bipartisan bill introduced in the House would require that any mortgage purchased by Fannie Mae or Freddie Mac carry state-regulated title insurance — closing a gap that federal housing regulators quietly opened when they began allowing cheaper, less-regulated alternatives in recent years. The legislation, called the Protecting America's Property Rights Act, was introduced by Reps. Andrew Garbarino (R-NY) and Vicente Gonzalez (D-TX) and is being debated in Congress now.

The bill has not yet passed. But the debate around it reveals something sellers need to understand before they get to the closing table: the protections that have long safeguarded property transactions are not guaranteed, and the alternatives being offered in their place carry real financial risk — risk that can land on the homeowner.

What Changed and Why It Matters to You as a Seller

For the better part of a decade, Fannie Mae and Freddie Mac have been permitting lenders to accept attorney opinion letters — sometimes called AOLs — in place of traditional title insurance for certain loans and refinances. The pitch was straightforward: lower closing costs for buyers by skipping the title insurance premium.

The problem, according to the American Land Title Association, is that attorney opinion letters are not subject to the same state regulatory framework as title insurance. They typically rely on a review of public records alone. And public records do not always reveal fraud.

Here is the number that should get a seller's attention: an ALTA-commissioned study conducted by Milliman in 2025 found that fraud and forgery account for more than 40% of total refinance claim costs. The average fraud or forgery claim on a refinance exceeded $206,000 — nearly seven times the average cost of all other refinance claim types combined. Roughly 40% of those losses involved issues that would not have turned up in a standard public records search.

When a buyer finances your home with a loan that lacks adequate title protection, and something goes wrong — a forged deed in the chain of title, an improperly notarized signature from a prior transfer, an undisclosed lien — the resulting litigation can unwind the sale or generate liability that bounces back toward the prior owner. That is not a hypothetical. It is the pattern title professionals spend their careers intercepting before closing.

The Work Happening Before You Sign — and What Happens Without It

Title insurance is distinct from most other forms of coverage in one important way: it is preventive, not just remedial. Title professionals do not simply write a policy and wait for something to go wrong. They search records, identify defects, clear liens, resolve ownership disputes, coordinate payoff statements and flag document inconsistencies — all before the transaction closes.

ALTA's 2026 curative study found that 52% of title professionals spend more than 11 hours per month on anti-fraud measures alone. More than 80% of purchase transactions require review of at least 11 documents, and close to 60% of files require clearing three to five requirements or exceptions before the deal can proceed.

That work is exactly what attorney opinion letters and similar alternatives do not replicate. They review what is in the public record. They do not carry the same duty to defend if litigation arises after closing. State insurance regulators in Virginia and Tennessee have both raised formal concerns about the consumer risk these products create — which means this is not just an industry lobbying position. It is a documented regulatory concern.

For sellers, that gap matters because a clean closing depends on a clean title process. If a buyer's lender accepts a lighter alternative and a defect surfaces later — even one created by a prior owner years ago — the fallout does not stay neatly on the buyer's side of the ledger.

What Sellers Should Be Doing Right Now

The Protecting America's Property Rights Act has not become law. Until it does, the patchwork of title protection standards remains in place. That makes it more important than ever for sellers to take the title process seriously on their end — not just the buyer's.

First, pull your own title history before you list. If there are old liens, recording errors, an estate issue, or any gap in the chain of ownership, you want to know about it now — not at closing. A title search on your own property is not expensive and can prevent a last-minute deal collapse.

Second, understand what the buyer's lender is accepting. If you are negotiating a sale and the buyer's financing is backed by Fannie Mae or Freddie Mac, ask your settlement agent whether the transaction will be covered by regulated title insurance or an alternative product. This is information you are entitled to, and it affects your exposure as the seller.

Third, do not assume a prior refinance cleared all issues. As the ALTA data makes clear, refinances are not automatically low-risk. A forgery or identity theft issue from a previous transaction on your property may still be lurking in the chain of title even if you refinanced without incident. A thorough title search will catch it. An attorney opinion letter may not.

The broader congressional debate will take time to resolve. In the meantime, the safest position for a seller is to treat title as a first-order concern — not a closing-day formality. If you are weighing a sale and want to understand what your property's title history looks like before you list, our instant-offer tool can be a starting point for assessing your options with full transparency on what we see in the data.