Fees for Title Insurance and Settlement Services Less Than 1 Percent of Borrower’s Total Life-of-Loan Costs: New Study From First American Chief Economist

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First American Financial Corporation (NYSE: FAF) published a study comparing fees for title insurance and settlement services with other closing costs charged to borrowers. The research highlights the inaccuracies in Fannie Mae's 2021 study and provides a more accurate analysis of various costs over the life of a mortgage. Title and settlement fees are found to be less than 1 percent of the borrower’s total life-of-loan costs.

—Analysis finds that fees for title insurance and settlement services are well below those of other costs charged to borrowers over the life of the mortgage loan—

SANTA ANA, Calif.--(BUSINESS WIRE)-- First American Financial Corporation (NYSE: FAF), a premier provider of title, settlement and risk solutions for real estate transactions and the leader in the digital transformation of its industry, today published a study comparing the fees for title insurance and settlement services with other closing costs charged to borrowers when purchasing a home.

Titled “Missing the Forest for the Fees – An Analysis of the Regressivity and Closing Cost Significance of Title and Settlement Fees,” the research points out the inaccurate conclusion drawn from Fannie Mae’s 2021 study of borrower life-of-loan costs and details the more accurate differences in various costs over the life of a mortgage from Fannie Mae’s own updated research in 2022. Title and settlement fees are less than 1 percent of the borrower’s total life-of-loan costs.

“With affordability at historic lows and the prospect of homeownership seemingly out of reach for low- and moderate-income families, it’s critical to evaluate the borrower’s total life-of-loan costs,” said Mark Fleming, chief economist at First American and author of the study. “Importantly, Fannie Mae’s own research finds that title and settlement fees are neither regressive nor a significant component.”

Disclaimer

Opinions, estimates, forecasts and other views contained in this page are those of First American’s Chief Economist, do not necessarily represent the views of First American or its management, should not be construed as indicating First American’s business prospects or expected results, and are subject to change without notice. Although the First American Economics team attempts to provide reliable, useful information, it does not guarantee that the information is accurate, current or suitable for any particular purpose. © 2023 by First American. Information from this page may be used with proper attribution.

About First American

First American Financial Corporation (NYSE: FAF) is a premier provider of title, settlement and risk solutions for real estate transactions. With its combination of financial strength and stability built over more than 130 years, innovative proprietary technologies, and unmatched data assets, the company is leading the digital transformation of its industry. First American also provides data products to the title industry and other third parties; valuation products and services; mortgage subservicing; home warranty products; banking, trust and wealth management services; and other related products and services. With total revenue of $7.6 billion in 2022, the company offers its products and services directly and through its agents throughout the United States and abroad. In 2023, First American was named one of the 100 Best Companies to Work For by Great Place to Work^® and Fortune Magazine for the eighth consecutive year and was named one of the 100 Best Workplaces for Innovators by Fast Company. More information about the company can be found at www.firstam.com.

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Media Contact:

Marcus Ginnaty

Corporate Communications

First American Financial Corporation

714-250-3298

Investor Contact:

Craig Barberio

Investor Relations

First American Financial Corporation

714-250-5214

Source: First American Financial Corporation

FAQ

What is the title of the study published by First American Financial Corporation (NYSE: FAF)?

The study is titled 'Missing the Forest for the Fees – An Analysis of the Regressivity and Closing Cost Significance of Title and Settlement Fees'.

What are the key findings of the study?

The study points out the inaccuracies in Fannie Mae's 2021 study and provides a more accurate analysis of various costs over the life of a mortgage. It highlights that title and settlement fees are less than 1 percent of the borrower’s total life-of-loan costs.

Who is the chief economist at First American and author of the study?

Mark Fleming is the chief economist at First American and the author of the study.

What does the study aim to evaluate?

The study aims to evaluate the borrower’s total life-of-loan costs, particularly in the context of affordability for low- and moderate-income families.

What disclaimer is provided by First American Financial Corporation?

First American Financial Corporation provides a disclaimer stating that the opinions, estimates, forecasts, and other views contained in the study are those of the Chief Economist and do not necessarily represent the views of the company or its management.