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AOLs and Title waivers

UWM announced that they will no longer be ordering Title Insurance policies on refi loans and will opt to order Attorney insurance letters causing a blow to the title underwriting market.

UWM launched TRAC+ product charging a flat closing fee of $1850.00 for refinance transactions. The closing transactions will still need Title Insurance.

Let's calculate the savings to the borrower on the sample transaction. Let's assume that the average loan on a refi transaction is $500,000. The policy premium with the split 80%/20% between title agent and underwriter, the total amount spent on the lender's policy is $1,800 - $2,000. Closing fees for refi are typically $1,000 to $1500, which would include document preparation, agent fee, search, credit, flood, appraisal and similar items on Final CD or HUD-1.

UWM is in essence cutting the closing cost on refi by 50%. I think this is a big win for the borrower and a huge blow to underwriters as more lenders will follow suit to compete with UWM.

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