Bulletin: TX000079

Date:
November 08, 2005
To:
All Issuing Offices in Texas
RE:
New Forms and Rules; Commissioner's Order for 2004 Hearing
Dear Associates:

The Commissioner adopted new Forms and Rules effective November 1, 2005. Those forms for which new rates are required will not be effective until Rate Rules are adopted.

Amended Texas Short Form Residential Mortgagee Policy One-to-Four Family (T-2R) (Exhibit 1)

This Policy has been amended to refer to new endorsements.  The Adjustable Mortgage Loan Endorsement (T-33) has been revised; it is now the Variable Rate Mortgage Endorsement (T-33).  The Policy also refers to the Variable Rate Mortgage - Negative Amortization Endorsement (T-33.1) and the Condominium Endorsement (T-28).  

This Form shall be issued on and after November 1, 2005.  The box for the Variable Rate Mortgage Endorsement (T-33) and the box for the Variable Rate Mortgage - Negative Amortization Endorsement (T-33.1) may be selected commencing November 1, 2005.  The box for the Condominium Endorsement (T-28) may not be selected until a rate is adopted for that Endorsement.

We encourage you to issue the Short Form Policy. It is accepted by Fannie Mae, Freddie Mac, and Ginnie Mae.  Use of the Short Form speeds delivery, reduces errors and post-closing corrections, and reduces review time. 

Variable Rate Mortgage Endorsement (T-33) and Variable Rate Mortgage - Negative Amortization Endorsement (T-33.1) (Exhibit 2)

These Endorsements to the Mortgagee Policy replace the Adjustable Mortgage Loan Endorsement (T-33), commencing November 1, 2005.   Amended Procedural Rule P-9(b)(6) authorizes the issuance of either of these Endorsements if the mortgage secures a variable rate loan.  You may issue the Variable Rate Mortgage Endorsement (T-33) upon request if the mortgage secures a variable rate loan, and you may issue the Variable Rate Mortgage - Negative Amortization Endorsement (T-33.1) upon request if the mortgage secures a variable rate loan that provides for possible negative amortization.   Rate Rule R-11.D provides that the rate for each endorsement (whether issued separately or chosen in the Short Form Mortgagee Policy) is $20. 

First Loss Endorsement (T-14) (Exhibit 3)

This revised Endorsement to the Mortgagee Policy is effective November 1, 2005. The First Loss Endorsement (T-14) agrees that the Title Insurer will not require maturity of the debt or foreclosure before paying a claim.  This Endorsement may be issued in commercial transactions upon request if the collateral includes at least two parcels of land.  Procedural Rule P-9(b)(11) does not require that all parcels be described in the Policy or be in TexasExisting Rate Rule R-11.i provides that the Rate for the First Loss Endorsement (T-14) to the Mortgagee Policy (T-2) on non-residential real property is $25 for each endorsement.

Verification of Services Rendered (T-00) (Exhibit 4)

This form has been substantially rewritten.  The modified form is effective November 1, 2005.

Completion Endorsement (T-3) (Exhibit 5)

Upon completion of improvements involving an Owner Policy or a Mortgagee Policy that contains the P-8 exceptions (for completion of improvements), the Completion Endorsement set forth in Endorsement Instruction II may be issued by using Endorsement T-3.  Procedural Rule P-8 and the Endorsement Instruction II are modified effective November 1, 2005 to allow the title insurer to issue or update the Restrictions, Encroachments, Minerals Endorsement (T-19) to the Mortgagee Policy, and to issue or update the Restrictions, Encroachments, Minerals Endorsement - Owner Policy (T-19.1) to the Owner Policy.  If the T-19 or T-19.1 Endorsement was previously issued with the Policy, no additional charge is made for the update.  If the T-19 or T-19.1 was not previously issued with the Policy, the regular charge for the Endorsement must be made pursuant to R-29.

Assignment of Rents/Leases Endorsement (T-27) (Exhibit 6)

This Endorsement to the Mortgagee Policy may not be issued until a Rate is adopted.  The Assignment of Rents/Leases Endorsement (T-27) may be issued simultaneously with the Mortgagee Policy, covering commercial land.  Procedural Rule P-60 provides that the Endorsement may not be issued on residential real property.  To issue the Endorsement, determine that the Assignment of Rents or Leases was properly executed by the mortgagor, and that all prior recorded assignments of rents or leases have been released or shown in Schedule B.

Condominium Endorsement (T-28) (Exhibit 7)

This Endorsement to the Mortgagee Policy may not be issued until a Rate is adopted.  Procedural Rule P-9(b)(15) provides that the Condominium Endorsement (T-28) may be issued simultaneously with the Mortgagee Policy covering residential real property.  The Endorsement may not be issued on commercial land and may not be issued if the Planned Unit Development Endorsement (T-17) is issued. 

Mortgagee Title Policy Binder on Interim Construction Loan (Binder) (P-16)

Procedural Rule P-16 has been amended effective November 1, 2005.  As amended, the Procedural Rule states that the Binder may be issued solely where (1) the obligor on the indebtedness is an original contractor who is also the record owner of the land, and (2) the security document for the indebtedness is not in the form of a Mechanic's Lien Contract.  Tex. Prop. Code §53.001 defines "original contractor" as a person contracting with an owner either directly or through the owner's agent.  Please call our underwriting personnel if you have any questions regarding this Rule.

Master Indemnity Agreement (T-29)

Amended Procedural Rule P-11(b)(1) and (c), which is effective November 1, 2005,  authorizes issuance of a Policy without exception to matters covered by the new Master Indemnity Agreement, if signed by a title insurer that had previously issued and if the matter is covered by the Master Indemnity Agreement.  Our instructions for reliance on the Master Indemnity Agreement (and separate Agreements previously executed) are covered by separate bulletin.

Rebates (P-53)

Procedural rule P-53 has been amended effective November 1, 2005.  This amendment conforms to changes in the law concerning rebates, and is addressed by separate bulletin. 

Limited Pre-Foreclosure Policy (T-98)

The form number for the Limited Pre-Foreclosure Policy is changed to T-98.  The form number for the Limited Pre-Foreclosure Policy Down Date Endorsement is changed to T-99.  These changes are effective November 1, 2005.

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.