We’ve been quiet here for some time, watching the market and analyzing trends, while adjusting to the changing investment climate. On 25 June A new bipartisan bill was introduced in the US Senate called the Title Insurance Requirement Included in GSE (Government-Sponsored Enterprise) Reform Bill. A similar bill is in the House.
Some have touted the bill as a relief from Federal involvement in the business sector since it will close down Fannie Mae and Freddie Mac with their government guarantees of mortgages. But a new set of regulations move in to fill this gap, and I have not heard much discussion about that side of it. A new layer of government oversight is being established and a new agency to watchdog the related industries and transactions.
The announced provisions of this bill appear to be ignorant of the whole non-conventional industry that has taken up a lot of slack and fill gaps after the conventional industry blew up in 2008. This seems like another (perhaps) well-intentioned overreach without a full picture of the economic system now operating. It appears to favor only high-dollar entrepreneurs, and big banks, which caused the problem in the first place.
For Texas, many, if not most, of these Federal regulations and requirements are redundant at best. Texas already has more stringent controls nad limitations in place to protect consumers against Real Estate fraud. Many think these are too narrowly focused and produce negative implications for the small business sector.
The Texas Property Code already requires notification to the primary lien holder in the case of transfer of title while keeping the existing mortgage in place. There are clear provisions to protect the homeowner/buyer nad the interests of a lender while leaving the parties in the transaction sufficient freedom to construct transactions as needed for special circumstances or individual needs.
It will be interesting to see what format of reporting may be required by this federal approach. The Texas Law is already very specific, protecting the consumer while enabling creative approaches to Real Estate problems, which cannot be easily micro-managed nationally.
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