A housing executive order directs a conditional pilot for proactive mortgage-insurance cancellation, but limits that pilot to mortgages made after it is established. The October 22 order was published in the Federal Register on October 28; it does not announce that a particular borrower's insurance has been canceled.
Which mortgages the pilot would review
The Federal Housing Finance Agency director must first determine that the pilot is in the best interests of the Federal National Mortgage Association and Federal Home Loan Mortgage Corporation, or the agency, and the American public.
The director would then direct those mortgage enterprises to establish periodic reviews of single-family loans they own, guarantee or securitize. Automated valuation models and other available data would assess current property values and identify borrowers who appear to meet equity and other cancellation requirements.
Cancellation still depends on applicable equity requirements, financial safety and soundness, contractual obligations and other statutory, regulatory and enterprise requirements. The procedures must include payment-history requirements.
Servicers are to notify borrowers promptly when insurance may be canceled under the pilot, to the extent permitted by law and operationally feasible, while reducing unnecessary documentation, appraisal costs and administrative barriers.
Title review and borrower savings
A separate provision conditionally directs expansion of the title acceptance pilot into an ongoing nationwide program through both enterprises. For eligible refinance transactions, an enterprise could accept an approved automated title review or other title-risk assessment instead of a lender's title insurance policy.
That direction is also subject to a best-interests determination, financial safety and soundness, the director's authorities and applicable law. The director must consider broader eligibility and specified reductions in documentation requirements and fees; the order does not itself grant every proposed waiver.
The director must require resulting program savings to pass through to borrowers and require lenders to tell borrowers about those savings.
Other directions and limits
The Agriculture and Veterans Affairs secretaries must reduce interest rates on single-family home loans made directly by their departments, consistent with applicable law and available appropriations. The order supplies no new numerical interest rate.
It also establishes a manufactured-housing task force, with recommendations due within 180 days of the order's date. Those recommendations concern manufacturing methods, approvals and federal housing programs.
Implementation remains subject to law and available appropriations. The order says it creates no legally enforceable right or benefit. Its directions are not evidence that the pilot has started, a refinance has qualified or a household has received savings.