Protecting America's Property Rights Act

Key Points

• This bill targets Fannie Mae and Freddie Mac, requiring them to use title protection products that are regulated by state insurance authorities or state regulators when they buy or sell conventional mortgages. This means the massive companies backing most American home loans must stick with traditional, state-regulated title insurance.
• If Fannie Mae or Freddie Mac buy a mortgage that doesn't use a state-regulated title product, they'd face a financial penalty: they must hold an extra 1% of the loan's unpaid balance in reserve capital. This makes it significantly more expensive for these companies to accept newer, less-regulated title alternatives.
• The federal housing regulator (FHFA Director) would have 180 days after the bill becomes law to write the specific rules and guidance needed to enforce these requirements, including making sure the title products are properly regulated by state authorities.
• The bill has bipartisan backing, introduced by Rep. Garbarino and Rep. Vicente Gonzalez of Texas. Supporters see it as protecting homeowners from risky title products, while critics argue newer alternatives could lower the closing costs that homebuyers pay. It was referred to the House Financial Services Committee.