Bulletin: NY000359

Date:
June 19, 2008
To:
All New York State Office Counsel, Managers and Agents
RE:
Short Sales and Flips

In the current economy, it is imperative we are diligent in spotting problems. The following are examples of transactions NOT TO BE INSURED:

Property owner negotiates a short sale with lender.

Property owner sells to straw man after payment of short sale.

Straw man sells to buyer for a price much higher than the short sale.

There can be a transaction where the straw man is not used:

Property owner negotiates short sale with lender.

Buyer purchases for price higher than short sale.

These transactions do not comply with our Bulletin 355 in that seller is selling for a price that is higher than the amount disclosed to the lender when negotiating a short sale.

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
 
NY000358 Distressed/Short Sales
 
SLS00234 Loan Fraud (Replaces both SLS00229 and SLS00230)
 
SLS2008005 Short Sale Transactions
Underwriting Manual:
None
Exceptions Manual:
None
Forms:
None