Bulletin: IN000008

Date:
May 19, 2003
To:
All Issuing Offices in Indiana
RE:
Indiana Property Value Reassessment

Dear Associates:

Indiana property-value reassessment has increased the assessed value of residential properties in 2002 up to two times what they were in 2001. In several counties the reassessment is impacting the 2002 property tax bills which are now subject to a delayed mailing anywhere from June to November. Notwithstanding the delay, lenders' instructions are requiring May taxes to be paid despite our inability to ascertain a definite amount for 2002 taxes payable 2003. As a result, appropriate precautions should be taken if May taxes are to be shown as paid in Schedule B of the policy. The following guidelines are being issued to prevent potential liability for nonpayment or underpayment of taxes at closing:

1. If required to pay May taxes for the year 2002 payable in 2003 and tax bills are unavailable, escrow a sufficient amount to cover any increase resulting from the reassessment. The tax amounts shown on the tax records for 2001 due and payable November 2002 can be used as a baseline for your escrow plus an additional amount to cover any increase resulting from the reassessment. The estimated impact on property tax payments after reassessment and tax restructuring will vary by county. In some counties, such as Marion County, the estimated impact is two times the amount that was due for 2001 taxes due and payable in 2002. The impact in other counties may only be one and half times the amount that was due for 2002 or less. The appropriate amount to escrow should be determined based on the available information regarding the tax shift in each county.

2. The following exception should be used in Schedule B:

Any possible additional or retroactive assessments for taxes against the land, and all interest and penalties which may accrue. Informational Note: Until the reassessment is completed, the tax information is based on current figures and the customer should contact the local taxing authorities for additional tax information. This commitment and/or policy does not insure the accuracy of tax information.

3.An additional precautionary step is to have the borrower execute a hold harmless and release for nonpayment of the correct amount of taxes at closing. A sample form is available through the references section at the end of this bulletin.

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:
None
Underwriting Manual:
None
Exceptions Manual:
None
Forms:
None