Voxtur to Launch Title Insurance Alternative for VA Loans
Voxtura real estate technology company, plans to publish an opinion piece on the attorney designation for Department of Veterans Affairs-backed mortgages, building on a growing product line.
The new product will be based on a recent revision to the Department of Veterans Affairs Handbook for Lenders, which provides guidance in situations where an attorney’s opinion letter is used, according to the company.
“The VA has never required a lender providing a VA loan to obtain title insurance, indicating in its lenders handbook that the lender may instead apply its owner title insurance requirements to VA loan transactions,” said Voxtur in a press release issued on Tuesday. “The Lenders Handbook now provides that effective September 29, the title insurance provisions have been revised to include attorney opinion letters.”
Voxtur says an attorney title notice letter can save a borrower as much as a full mortgage payment, but insurers have raised questions about whether waiving coverage introduces too much risk.
Voxtur dismissed these concerns.
“Using attorney opinion letters as an alternative to title insurance is an established practice that provides security and coverage to lender and borrowers comparable to that of title insurance,” said CEO Jim Albertelli in an emailed statement. “As this alternative continues to grow in popularity, we anticipate that misinformation will continue to be spread, particularly by those who view an alternative product as a competitive threat.”
The use of letters as an alternative to title insurance has grown since the biggest buyer of government-linked mortgages Fannie Mae joined its smaller competitor, Freddie Mac, in cautiously green light limited use of them.