The new product will be based on a recent
"The VA has never required a lender making a VA loan to obtain title insurance, stating in its lenders handbook that the lender may instead apply its owner title insurance requirements to VA loan transactions," Voxtur said in a press release issued Tuesday. "The lenders handbook now provides that effective Sept. 29, the provisions regarding title insurance have been revised to include attorney opinion letters."
An attorney title opinion letter can save a borrower as much as an entire mortgage payment, according to Voxtur, but insurers have raised questions about whether forgoing coverage introduces too much
Voxtur has dismissed those concerns.
"The use of attorney opinion letters as an alternative to title insurance is an established practice that provides security and coverage to the lender and borrowers comparable to that of title insurance," CEO Jim Albertelli said in an emailed statement. "As this alternative continues to grow in popularity, we anticipate that misinformation will continue to be released, particularly by those that see an alternative product as a competitive threat."
Use of the letters as an alternative to title insurance has been growing since major government-related mortgage buyer Fannie Mae joined its smaller competitor, Freddie Mac, in