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.
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 lead Fannie Mae regional office (see E-1-03, List of Contacts) to determine where or under what conditions the loan is eligible for delivery to Fannie Mae.
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 lead Fannie Mae regional office (see E-1-03, List of Contacts) 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.
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.
The table below provides references to the Announcements that have been issued that are related to this topic.