Selling Guide

Published September 4, 2018

B7-2-02: Title Insurer Requirements (09/24/2013)

This topic contains information on title insurer requirements, including:

Rating Requirements

A title insurer is acceptable if it has a rating from at least one independent rating agency that meets the following standards.

Rating Agency Rating Requirements
Demotech, Inc. Financial Stability Rating of “S” (Substantial) or better or a Statutory Accounting Rating of “C” (Average) or better
Duff & Phelps Credit Rating Company “BBB” or better
Fitch, Inc. “BBB” or better
Kroll Bond Rating Agency, Inc. “C” or better
Moody’s Investors Service “Baa2” or better
Standard and Poor’s, Inc. “BBB” or better

If Fannie Mae determines that a particular title agency is unacceptable even if it meets these ratings, it will notify lenders by posting the name of the insurer on Fannie Mae's website.

Insurer No Longer Eligible

If a title insurer that satisfied Fannie Mae’s rating requirement when a mortgage was closed no longer satisfies it at the time the mortgage is delivered to Fannie Mae, the lender must contact its Fannie Mae customer account team to determine where or under what conditions the loan is eligible for delivery to Fannie Mae.

New Insurer Not Yet Rated

If a new title insurer has not yet been rated by at least one of Fannie Mae’s designated rating agencies, the lender may request a waiver of Fannie Mae’s requirement by sending its Fannie Mae customer account team sufficient financial information about the title insurer to enable Fannie Mae to make a proper evaluation of the insurer’s financial condition and any risks that it might present to Fannie Mae.

Ineligible Insurer Covered by Reinsurance

If an insurer is fully covered by reinsurance with a company that satisfies Fannie Mae’s rating requirement, the insurer is acceptable provided that the primary insurer and the reinsuring company are both licensed to issue title insurance within the state where the property is located and are in good standing with that state’s insurance regulator.

Both insurance carriers must execute an Assumption of Liability Endorsement (Form 858) or an equivalent endorsement that provides for 100% reinsurance of the primary insurer’s policy and a 90-day written notice of termination of the reinsurance agreement. The alternative endorsement must be attached to the title insurance policy for each individual mortgage.

Related Announcements

The table below provides references to the Announcements that have been issued that are related to this topic.

Announcements Issue Date
Announcement SEL-2013–07 September 24, 2013
Announcement SEL-2013–03 April 9, 2013
Announcement SEL-2012–10 October 2, 2012