Protecting America's Property Rights Act
The Protecting America’s Property Rights Act would require the Federal housing enterprises (Fannie Mae and Freddie Mac) to tighten how they manage risk related to liens, encumbrances, or defects in property titles. Specifically, it mandates the Enterprises to use third-party products that are regulated by state authorities (either state insurance authorities or state regulators) to address such title-related risk. If a mortgage purchased by the Enterprises does not meet these requirements, the Director of the Federal Housing Finance Agency (FHFA) must impose an additional capital buffer of 1% of the mortgage’s unpaid principal balance. The bill also requires the FHFA Director to issue implementing regulations within 180 days to ensure compliance and to verify that any qualifying third-party product is properly regulated. In short, the bill aims to strengthen title-risk management for mortgages bought by the Enterprises and to ensure additional capital is held when those standards aren’t met.
Key Points
- 1Establishes a new risk-management requirement for title-related risk by mandating the use of third-party products regulated by state insurance authorities or state regulators.
- 2Imposes an extra capital requirement: 1% of the unpaid principal balance for mortgages purchased that do not meet the new risk-management standards.
- 3Directs the FHFA Director to issue implementing regulations and guidance within 180 days to ensure compliance and to verify proper regulation of qualifying products.
- 4Expands the safety and soundness framework applicable to the Enterprises (Fannie Mae and Freddie Mac) by adding these title-risk provisions.
- 5Uses existing statutory definitions for “Enterprises” and the FHFA Director to anchor the new requirements.