Bulletin: NY000358

Date:
June 18, 2008
To:
All New York State Office Counsel, Managers and Agents
RE:
Distressed/Short Sales

This bulletin supplements Bulletin 355. It contains an exception to be included in all reports where it is known, or there is a good likelihood there is a distressed/ short payoff.

Approval of Stewart Agency Legal Services is required before closing a transaction with a short/distressed sale.

This exception must be included in all transactions where you know, or believe short sale will occur:

If transaction is a distressed (short) sale, the following requirements must be satisfied:

  1. A payoff letter is required from the current lender stating the amount the lender is willing to accept and the conditions of the transaction.

  2. Lender's payoff must be followed exactly. There can be no variation from the conditions.

  3. A HUD-1 must be signed by buyer and seller and a copy must be kept in title file. The lender will likely require to see the HUD before the sale can be completed.

  4. If seller is to receive no proceeds, obtain copies of all checks, an affidavit from settlement agent, or buyer if there is no settlement agent, stating seller has received none of the proceeds.

  5. All junior liens and mortgages are to be satisfied. If there are no instructions from the lien holder on pay off, the lien must be excepted.

  6. If foreclosure has started a letter must come from attorney stating that upon receipt of amount stated in lender's letter, attorney will discontinue action and cancel lis pendens.

For on-line viewing of this and other bulletins, log onto: www.stewart.com/new-york

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:
NY000355 Short/Distressed Sales
 
SLS00230 This Bulletin has been replaced by SLS00234.
 
SLS2008005 Short Sale Transactions
Underwriting Manual:
None
Exceptions Manual:
None
Forms:
None