- February 18, 1993
- All Policy Issuing Agents, Offices and Approved Attorneys - Utah
- Insuring Mortgages
Numerous questions continue to surface with increasing frequency relating to insuring mortgages at less than their stated amount.
The Company allows the Amount of Insurance to be less than the stated amount of the mortgage ONLY when there is other verifiable collateral not including the land described.
In paragraph 4 of Schedule A of the Policy the following language must appear:
"Notwithstanding the stated amount of the mortgage shown herein, the Company limits its liability hereunder to the Amount of Insurance shown above."
Further, as the last exception of Schedule B - Part I, the following exception should appear:
"In consideration of the issuance of this policy at the request of the Insured for an amount less than the stated amount of the obligation secured by the mortgage referred to in Schedule A, the Insured accepts this policy under the condition that the amount of said policy shall be reduced upon any payment made on said indebtedness by the same proportion that the amount of the policy bears to the stated amount of the obligation actually secured by said mortgage at the Date of Policy and shown in Schedule A - Paragraph 4 hereof."
If you have any questions in this regard, please address them to me.
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.