Bulletin: NY000360

Date:
June 23, 2008
To:
All New York State Office Counsel, Managers and Agents
RE:
Short Sales and Flips

There have been many questions on the interpretation of Bulletin 359. This bulletin will clarify Bulletin 359.These are two situations where Stewart Agency Legal Services approval is required before insuring.

1. A short sale is negotiated with lender. It can be by owner, owner's attorney or a representative of the owner;

  • Property owner then sells to straw man after payment of short sale to lender. Sometimes the property owner makes a profit in the sale to the straw man in contravention of the short sale letter;
  • Straw man sells to buyer for a price much higher than the short sale

2. A short sale is negotiated with lender. It can be by owner, owner's attorney or a representative of the owner;

  • Property owner sells to a buyer for greater than the short sale and keeps the money

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.

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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
 
NY000359 Short Sales and Flips
 
SLS00230 This Bulletin has been replaced by SLS00234.
 
SLS2008005 Short Sale Transactions
Underwriting Manual:
None
Exceptions Manual:
None
Forms:
None