Bulletin: SLS2008021

Date:
November 13, 2008
To:
All Issuing Offices
RE:
Foreclosures and Mechanic's Liens

Dear Associates:

Generally, downturns in the housing market give rise to an increase in mechanic's lien claims. In order to minimize our mechanic's lien losses, please adhere to the following procedures when insuring transactions involving a mechanic's lien if there is a foreclosure or a sale after foreclosure or deed in lieu of foreclosure:

Do not assume priority over mechanic's liens if there is a foreclosure, unless such liens are properly foreclosed judicially and there is no possibility of loss of priority to liens that could be filed after foreclosure, or unless foreclosed non-judicially and the mortgage cannot be subordinate to any mechanic's liens. Do not assume that liens cannot be filed if the lender has taken title by deed in lieu of foreclosure. 

Company Policy requires approval from a Stewart Underwriter in transactions of any size when insuring based upon or after a foreclosure or deed in lieu of foreclosure, if you do not receive satisfactory proof that there has been no lienable work or improvement to the land.

If you have any questions, please contact Stewart Underwriting Personnel.

For on-line viewing of this and other bulletins, please log onto www.vuwriter.com.

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:
SLS2008003 Mechanic's Liens
 
SLS2008006 Builder Transactions and Mechanic's Liens
Underwriting Manual:
None
Exceptions Manual:
None
Forms:
None