Bulletin: SLS2010027

Date:
December 20, 2010
To:
All Issuing Offices
RE:
Mortgage Challenges

Dear Associates:

A recent case invalidating a deed of trust highlights the importance of examining all litigation affecting a mortgage or deed of trust. The case at issue involved a challenge to the validity of the lien of a deed of trust. In that case, the court declared the deed of trust "a nullity and of no further force and effect" even though the debt had not been paid and the lien had not been released. The property was subsequently sold to a third party.

If your search discloses any litigation seeking to challenge a foreclosure or a trustee's sale, or otherwise intended to undermine the validity or enforceability of a mortgage or deed of trust, you should continue to show both the mortgage/deed of trust and the lawsuit as exceptions on all commitment and policies, notwithstanding a judicial determination setting aside, quieting title or otherwise affecting the mortgage or deed of trust. Each such proceeding must be thoroughly examined. You should not omit such exceptions without Underwriter approval, unless you have received proof of payment of the debt and a release, in recordable form, sufficient to clear the records.

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

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:
UT2010003 Utah Attorney Challenges MERS
Underwriting Manual:
None
Exceptions Manual:
None
Forms:
None