FAQ

What is an Attorney Opinion Letter (AOL)?
An attorney opinion letter, also known as a title opinion or opinion of title, is a legal document provided by a qualified state-specific real estate attorney. The AOL offers a professional analysis of a property's title records, identifying potential issues or defects. It concludes with the attorney's determination the title is clear and marketable, thereby assuring buyers, lenders, and other parties involved in the transaction that the real estate transaction may move forward, and an insurance policy designed to indemnify the homeowner and lender against potential losses arising from title defects, further protecting their interests
Title insurance is indemnity insurance that protects against financial loss from defects in the title to real property and the invalidity or unenforceability of mortgage loans. It is commonly used in real estate transactions to protect the buyer and the lender.
Both the homeowner and lender can rest comfortably knowing their insurance policies are backed by an A+-rated underwriter, as rated by AM Best.
The American Land Title Association (ALTA) has tried to state that AOLs do not cover Fraud. Not only does an insured attorney opinion letter cover fraud, but our Closing Protection Letter (CPL) provides coverage for an entire year longer than what ALTA title insurance provides. So, YES, AOLs protect against FRAUD.

Yes, coverage is no different than the traditional ALTA insurance policy. Insured Attorney Opinion Letter policies are subject to complete research of public records, which is no different from ALTA insurance policies. The same research confirming how the property is vested, open mortgages, liens, and property tax status is completed to the same level of scrutiny for an ALTA insurance policy. This assures the homeowner and lender that their interests are fully covered.

AOLs also provide full Gap insurance from the closing through document recording at the County.

In the unlikely event that a claim occurs, the process emulates the same method that has been followed historically for ALTA insurance products, with resolution/claim payment promptly.

Yes. The insurance carrier is licensed and regulated in all 50 states. The attorney who generates the AOL is also licensed in the state where they practice.
Residential purchase and refinance transactions of up to 1 million dollars are insurable in all 50 states.

Media

  • Why is this alternative to the lender’s title insurance requirement being offered?

    In conjunction with FHFA and the Congressional Banking committees, the GSE believes that Attorney Opinion Letters (AOLs) can provide an acceptable level of protection at a much lower cost to the borrower than a traditional lender’s title policy. In recent years, widespread digitization of real estate records and technological advances have improved the process of confirming marketable title, but that has not translated to lower costs for borrowers. Research shows that low-income and first-time homebuyers pay disproportionally more in closing costs. Since beginning to accept AOLs, savings for borrowers have been significant. On average, refinancing borrowers have saved over $1,000 when an AOL was used instead of a traditional lender’s title insurance policy.

  • Are AOLs new to the housing market?

    AOLs have been used on select mortgage transactions for decades. Fannie Mae specifically has also purchased more than 10,000 loans with AOLs since 2009 and has not experienced losses from title claims on these loans.

  • How does the use of an AOL instead of title insurance impact the lender?

    The AOL is an insured product. Unlike the messaging that emanates from large title organizations and their trade group, coverage from an AOL is not dissimilar to title insurance in that it lives for the life of the loan, covers the lender and the borrower, and contains coverage against fraud.

  • Closing costs have risn,. Putting pressure on borrower’s budgets

  • Federal Housing Finance Agency Acceptance of AOL’s