Bulletin: NJ000061

Date:
May 09, 2002
To:
All Issuing Offices in New Jersey
RE:
Notary Class Action

Dear Associates:

The title industry in New Jersey has been the target of a recent class action lawsuit (the "Class Action") based upon allegations that certain title agencies and offices of underwriters permitted notaries to overcharge for notary fees at real estate settlements. As you know, the charges for notarizing documents is controlled by state statute (N.J.S.A. 22A: 4-14). The statute provides for the following fees:

$.50 for administering an oath or taking an affidavit;
$1.00 for taking proof of a deed; and
$1.00 for taking all acknowledgments.

There is currently a bill pending before the New Jersey Legislature to amend the statute to increase the fees permitted for notarization. Of particular interest to the title industry are the provisions in the proposed legislation that would allow a single per transaction charge of $15.00 for notarizing all signatures of the grantors in real estate transactions and $25.00 for mortgagors, regardless of the number of signatures to be notarized in the transaction.

To date, the proposed legislation has not been enacted. The permitted charges have not changed. All charges for notarization must be in strict accordance with the currently existing Statute.

Stewart Title Guaranty Company has joined with other underwriters to defend its agents named as defendants in the Class Action and, with the other underwriters, has agreed to fund a settlement of the lawsuit. A proposed settlement of the Class Action in the amount of $678,000.00 is pending. The costs associated with Class Action lawsuits are very high. Any settlement will undoubtedly require that all parties agree not to violate the notary statute in the future. Accordingly, make sure that all notary fees charged at settlements in which your agency is acting as settlement agent are made in strict conformity with the statute, as set forth above.

Similarly, the New Jersey Land Title Insurance Rating Bureau Rate Manual ("Rate Manual") specifies the rates, fees and charges approved by the Commissioner of the New Jersey Department of Banking and Insurance. Failure to strictly comply with the Rate Manual may subject you to sanctions by the Department of Banking and Insurance. In addition, you may become a defendant in a class action lawsuit similar to the Class Action concerning the notary fees. All charges made by your agency must be made in strict conformity with the Rate Manual. You are not permitted to charge more or less than the prescribed charges. Particular attention should be paid to recording charges and pass through charges. Section 7.1 of the Rate Manual provides that recording fees must be charged at the exact rate charged by the recording office, plus a $5.00 service charge per document. Recording fees may not be estimated. Section 5.3.1 provides that pass through search costs must be charged at the exact amount charged to you by a third party provider. Accordingly, tax searches, judgment searches, corporate status reports and similar search fees must be charged at the exact cost paid by your agency. Section 7.5 provides that when a customer requests the use of overnight delivery service, only the exact cost of the service may be passed through to the customer.

If you have any questions concerning the proper charge under the Rate Manual, please do not hesitate to call our office.

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:
None
Underwriting Manual:
None
Exceptions Manual:
None
Forms:
None