Bulletin: IN2009003

Date:
November 25, 2009
To:
All Indiana Issuing Offices
RE:
New Requirements for Closing Agents to Report Real Estate Professional Licensing Information

Dear Associates:

In 2008, the Indiana legislature passed a law requiring the Indiana Department of Insurance (DOI) to establish and maintain an electronic database by September 1, 2009, for the reporting of names and license numbers of certain real estate professionals participating in residential real estate transactions. The purpose of the database is to aid in the investigation of mortgage fraud.

The DOI has created an electronic database and an on-line form for reporting the required information that can be accessed at http://in.gov/apps/in_rreal/Login.aspx and is referred to as the Residential Real Estate Acquisition of Licensee Information and Numbers Database (RREAL IN). The website contains information on the RREAL IN database and the DOI's scheduled training sessions for training in-state title companies on how to input information into the database. The DOI anticipates that a web-based training session for out-of-state title companies will be available in mid-December.

The new law requires reporting of the names and license numbers of certain real estate professionals involved in a residential real estate transaction by the closing agent. Closing agent is defined as any person that closes a first lien purchase money mortgage or refinancing transaction. Copies of the relevant statutes can be accessed at the following links: http://www.in.gov/legislative/ic/code/title27/ar7/ch3.html and http://www.in.gov/legislative/ic/code/title6/ar1.1/ch12.html. The following is a summary of the new law.

As of January 1, 2010, the following persons or entities involved in a single family residential purchase money or refinance real estate transaction are required to provide their legal names and licensing information to the closing agent prior to closing in order for the closing agent to input the information into the DOI's database:

  • Any loan brokerage business licensed under IC 23-2-5

  • Any originator licensed under IC 23-2-5

  • Any principal broker licensed under IC 25-34.1

  • Any salesperson or broker-salesperson

  • Any appraiser licensed under IC 25-34.1-3-8

  • Any mortgagee required to be licensed under IC 24-4.4 and IC 24-4.5-3-502

The closing agent is responsible for inputting the information received by the specified parties into the DOI's database as soon as possible after closing. Lenders and brokers are required to report the names and licensing numbers for any appraisers involved in the transaction. Realtors® may report the name and licensing number for any principal broker involved in the transaction. In addition, the closing agent is required to input the names of the buyer and seller in a purchase money transaction, the license number for the closing agent, the license number for the title insurance agency involved in the closing and the name of the title insurance underwriter issuing the policy along with the code assigned to the underwriter by the National Association of Insurance Commissioners (NAIC). The NAIC Code for Stewart Title Guaranty is 50121. In addition to inputting the names and license numbers, the closing agent must also respond to questions concerning when he/she received the closing instructions from the lender and on what date the transaction actually closed.

Any party that does not submit their legal name or license number to the closing agent prior to closing is subject to a $100 penalty. State statute provides that the closing agent is not liable for failure to report the parties' information if the information cannot be determined or if any of the parties specified by the statute are not involved in the transaction. The closing agent will also not be liable to a customer for failure to submit or input information to the DOI database. The DOI database is a confidential database except to the extent that the DOI, the closing agent, and other specified federal and state government authorities can access the database as permitted by law. A closing agent is required to exercise all necessary caution to avoid disclosure of any information input into the database.

If you have questions related to this bulletin, please contact your local underwriting personnel or Stewart Legal Services.

For on-line viewing of this and other bulletins, please log onto www.vuwriter.com.

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