Bulletin: FL000065

Date:
June 10, 1997
To:
All Florida Stewart Offices and Agents
RE:
First Lien Letters

Dear Associates:

The subject of the first lien letters has been a matter of some contention for Florida of late. Early this year we issued a Bulletin to Florida agents concerning a 1996 publication from the insurance department briefly indicating that the first lien letter is not an approved form and it should not be issued. This was distributed with our bulletin of January 6, 1997 for your use in dealing with lenders requesting such letters.

The Houston Legal Department distributed a Loss Prevention Bulletin dated March 18, 1997 suggesting that you decline to issue such after you were cautioned that whatever liability you assume by executing a first lien letter is not backed up by your underwriter.

The Florida Land Title Association has been working with the Mortgage Banker's Association of Florida to resolve this matter. In that light the May/June 1997 issue of the Florida Mortgage Banker magazine carried a one page article which quotes in full a letter from the insurance department to Lee Huszagh, the Executive Secretary of the FLTA, sating clearly that the department considers the no lien letter is not an approved form and may not be issued and indicates that the desired coverage is really covered under "gap" coverage.

In the question and answer column following it is made clear that such letter is signed without authority and is an unapproved form of title guarantee. A full copy of that article is available through the Florida State office in Tampa and it is recommended that you exhibit this article in responding to future requests by any lender for a first lien letter.

THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER  AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.

References

Bulletins Replaced:
None
Related Bulletins:
FL000062 First Lien Letters; Florida Form 9 - Oil, Gas and Mineral Rights
Underwriting Manual:
None
Exceptions Manual:
None
Forms:
None