Bulletin: MU000032

Date:
November 19, 1999
To:
All Issuing Offices in Alabama; Alaska; Arkansas; Arizona; California; Colorado; Connecticut; Delaware; District of Columbia; Florida; Georgia; Hawaii; Idaho; Illinois; Indiana; Iowa; Kansas; Kentucky; Louisiana; Maine; Maryland; Massachusetts; Michigan; Minnesota; Missouri; Mississippi; Montana; Nebraska; New Hampshire; New Jersey; New York; Nevada; North Carolina; North Dakota; Ohio; Oklahoma; Pennsylvania; Rhode Island; South Carolina; South Dakota; Tennessee; Utah; Virginia; Vermont; Washington; Wisconsin; West Virginia; Wyoming.
RE:
Speeding Up the Policy: ALTA Short Form Residential Loan Policy (10/17/92); Date of Policy on Regular Owner's or Loan Policy [Partially Replaced]

Note: Portions of this Bulletin have been replaced by SLS2009012

Dear Associates:

You Can Save Money and Time With the Short Form

The ALTA Short Form Residential Loan Policy can save you time and money.

It eliminates typing and proofing Schedule B exceptions. In most cases, you do not need to add specific exceptions. The Policy has standard, preprinted exceptions and affirmative insurance.

It eliminates review of Schedule B exceptions by the lender. Usually, there are no specially typed exceptions to review.

It avoids common corrections of the Policy due to typographical errors.

It can be issued immediately after settlement: there is no need to await recording information, unless the lender requires same. The Policy gives automatic "gap" coverage.

It allows incorporation of endorsements, without having to attach the actual forms. You just mark a box; you do not have to attach the endorsement.

It reduces the paper shuffle: you simply issue the Policy, which is produced on one piece of paper.

We encourage you to offer this Policy to your customers. Both Fannie Mae and Freddie Mac have approved our issuance of the Policy and it is acceptable to HUD and VA. Of course, you need to review lender's instructions on the form to be issued, since the lender ultimately chooses the form it wants.

Speed Up Policy Issuance on Short Form Policy

You can speed up delivery of your policy by issuing the Short Form. You simply put the date of settlement in the blank on Schedule A for the Date of Policy. The Policy then says that the effective date is the later of that date or the date of recording. That means the Short Form gives "gap coverage" between your date of examination and the date of recording. You do not need to await recording information, if this is acceptable to your insured. Tell the lender that this will speed up delivery of the policy to them so they can deliver their loan immediately into the secondary market. If your lender objects please notify Wanda Mae at (800)729-1900 ext. 8452, or (713)625-8452 and she will send the Fannie Mae guidelines to the lender and if necessary initiate a conference call with the lender to explain the benefits of this policy.

Obviously, you must still record the mortgage the same day you issue the policy or at the latest, first thing the next morning or business day. We advise that you establish a procedure for recording twice a day, if practical in your area.

Rates for the Short Form

You charge the normal rates on Loan Policies for issuance of this Policy and the endorsements that you mark.

Search of Title for the Short Form

You must perform a general index search for the time period of the statute of limitations on judgments in your jurisdiction, and for the time period of the limitations on Federal judgments and Federal tax lien. You must check taxes, assessments of all types, and other governmental charges. You should be satisfied that there are no recent unpaid bills for improvements.

If you issue the Policy on a first lien and you have a prior title policy (owner's, loan or master/short form issued by an authorized title insurer), search from prior policy or two (2) deeds back. If you do not have a prior policy, search for two deeds back.

If you issue the Policy on a subordinate lien, search one (1) deed back.

First Lien and Subordinate Lien Insured on Short Form

The Policy may insure a first lien or subordinate lien. See our instructions in Exhibit 1.

Type of Property Covered by Short Form

You may issue the Policy on Fee Simple. If you are asked to issue the Short Form Loan Policy on a Leasehold, please call our underwriting personnel.

Issue the Policy only on one-to-four family residential property. The land should be a platted lot or a metes and bounds tract not exceeding 25 acres.

What Does Short Form Say

The Short Form Policy is an actual policy. There are two sides to the Policy: Schedule A and Schedule B. The first paragraph above Schedule B incorporates the terms of the ALTA Loan Policy (10-17-92) without reprinting those terms. That shortens the Policy. You do not need to attach a Loan Policy jacket to this Policy, since it is an individual Loan Policy, complete with Schedules A and B. See our instructions in Exhibit 1.

We still issue the Master Loan Policy and Certificates. We have found that most lenders now prefer the Short Form Loan Policy. If a customer requests a new Master Policy, please call the National Legal Department at (800)729-1902.

Speed Up Policy Issuance on Regular Policy: Date of Policy

You can speed up delivery of regular owner's and loan policies immediately after closing if acceptable to your insured. How can you accomplish this when you have not received the recording information?

It's simple. Modify what goes into the "Date of Policy" blank on Schedule A. Instead of adding the recording information, state:

"Actual settlement date or the date of recording of the insured [deed, if owner's policy; mortgage, if loan policy], whichever is later".

Obviously, you must still record the deed or mortgage the same day you issue the policy or at the latest, first thing the next morning or business day. We advise that you establish a procedure for recording twice a day, if practical in your area.

This technique will enable you to issue your owner's and loan policies in a timely fashion. Not only will you have a satisfied customer, you will create a situation that could result in business referrals.

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.

Comments on the policy appear below in BOLD print.

EXHIBIT 1

ALTA Short Form Residential Loan Policy and Addendum 1992 2-10

NOTE: THIS FORM CONSISTS OF ONE PIECE OF PAPER AND TWO SIDES. YOU DO NOT ATTACH A REGULAR LOAN POLICY JACKET OR ENDORSEMENTS TO IT.

SHORT FORM RESIDENTIAL

LOAN POLICY-ONE-TO-FOUR FAMILY

Issued by

STEWART TITLE GUARANTY COMPANY

SCHEDULE A

Amount of Insurance: THIS SHOULD BE THE AMOUNT OF THE MORTGAGE OR DEED OF TRUST DEBT.

[Premium: ___________ ] THIS PREMIUM IS YOUR NORMAL PREMIUM CHARGE FOR A REGULAR ALTA LOAN POLICY, PLUS ANY PREMIUM-BEARING ENDORSEMENTS CHECKED BELOW.

[File Number: ________ ] USE YOUR OWN NUMBERING SYSTEM FOR THIS NUMBER.

Loan Number: THIS IS THE LOAN NUMBER, IF ANY, GIVEN TO YOU BY THE LENDER.

Mortgage Amount: THIS IS THE AMOUNT OF MORTGAGE DEBT; IT SHOULD BE THE SAME AS THE AMOUNT OF INSURANCE.

Mortgage Date: THIS IS THE DATE THE MORTGAGE WAS EXECUTED.

Policy Number: YOU DO NOT NEED TO COMPLETE, SINCE IT IS SHOWN BELOW ON THE PRINTED FORM. NOTE THAT FANNIE MAE WANTS YOU TO USE THE PREPRINTED FORMS FROM US AND DOES NOT WANT YOU TO LASER PRINT YOUR OWN.

Date of Policy: ______or date of recording of insured mortgage, whichever is later. YOU PLACE THE DATE OF SETTLEMENT IN THE BLANK, UNLESS LENDER'S INSTRUCTIONS SAY OTHERWISE. THIS PROVISION AUTOMATICALLY PROVIDES GAP COVERAGE.

Name of Insured: THIS IS THE LENDER, OR THE ASSIGNEE IF THE ASSIGNMENT IS RECORDED CONTEMPORANEOUSLY. YOU MAY ADD "ITS SUCCESSORS AND/OR ASSIGNS" IF REQUESTED BY THE LENDER.

Name of Borrower(s): THE BORROWERS ARE THE PARTIES WHO EXECUTE THE MORTGAGE.

Property Address: THIS SHOULD BE THE ACTUAL ADDRESS OF THE LAND COVERED BY THE MORTGAGE OR DEED OF TRUST. THE POLICY DOES NOT CONTAIN A LEGAL DESCRIPTION, BUT INCORPORATES THE DESCRIPTION CONTAINED IN THE MORTGAGE OR DEED OF TRUST. YOU MUST BE SATISFIED THAT THE ADDRESS IS CORRECT AND YOU MUST ADD THE ADDRESS IN ORDER TO ISSUE THIS POLICY.

County and State: HERE ADD THE COUNTY AND STATE IN WHICH THE LAND IS LOCATED.

The estate or interest in the land identified in this Schedule A and which is encumbered by the insured mortgage is fee simple and is at Date of Policy vested in the borrower(s) shown in the insured mortgage and named above. THE POLICY IS DESIGNED ONLY FOR ISSUANCE ON FEE SIMPLE. PLEASE CALL US IF YOU ARE ASKED TO ISSUE THIS POLICY ON A LEASEHOLD.

 

The land referred to in this policy is described as set forth in the insured mortgage and is identified as the property address shown above. YOU DO NOT NEED TO TYPE IN THE LEGAL DESCRIPTION. YOU SIMPLY ADD THE ADDRESS ABOVE AND REVIEW THE LEGAL DESCRIPTION IN THE MORTGAGE OR DEED OF TRUST TO BE SURE IT COVERS THE RIGHT LAND.

 

This policy consists of [one] page, [including the reverse side hereof,] unless an addendum is attached and indicated below: IF THERE ARE EXCEPTIONS DISCLOSED BY YOUR EXAMINATION, OTHER THAN MINERALS, EASEMENTS OR RESTRICTIONS, YOU NEED TO MARK THE FIRST LINE BELOW, ATTACH THE ADDENDUM, AND INCLUDE THE EXCEPTIONS IN THE ADDENDUM.

_____ Addendum attached MARK THIS LINE IF YOU ADD AN ADDENDUM.

_____ No addendum attached MARK THIS LINE IF YOU DO NOT ADD AN ADDENDUM.

The ALTA endorsements indicated below are incorporated herein: YOU DO NOT ATTACH ENDORSEMENTS; YOU SIMPLY MARK THE APPLICABLE CHOICE BELOW AND CHARGE FOR THE ENDORSEMENT IF IT IS PREMIUM BEARING. IF YOU ARE ASKED TO ISSUE OTHER ENDORSEMENTS, PLEASE CALL US. FLORIDA ALSO INCLUDES NAVIGATIONAL SERVITUDE, SURVEY AND MODIFIED FORM 9 AS OPTIONAL ENDORSEMENTS.

_____ Endorsement 4 (Condominium) or

_____ Endorsement 4.1 USE WHERE CONDOMINIUM ASSESSMENTS HAVE PRIORITY.

_____ Endorsement 5 (Planned Housing Unit) or

_____ Endorsement 5.1 USE WHERE PROPERTY OWNERS' ASSESSMENTS HAVE PRIORITY.

_____ Endorsement 6 (Variable Rate)

_____ Endorsement 6.1

_____ Endorsement 6.2 (Variable Rate-Negative Amortization)

_____ Endorsement 7 (Manufactured Housing)

_____ Endorsement 8.1 (Environmental Protection Lien) referring to the following state statute(s): ___________________________________ ON SINGLE FAMILY, ADD THE FOLLOWING EXCEPTION FOR THE PARTICULAR STATE BELOW; IF IN ANOTHER STATE, SAY "NONE." IF 2-4 FAMILY, CONSULT OUR GUIDELINES ON EXCEPTIONS TO USE FOR THE 8.1 ENDORSEMENT.

(A)Georgia - §12-13-12;

(B)Kentucky - §224.01-400

(C)Louisiana - La. Rev. Stat. Ann. §13:2575; §30:2281; §30:2351.25;

(D)Maryland - Md. Environ. Code Ann. §7-266;

(E)Michigan - §299.543; §299.616a; §29.16; §299.842; §323.10;

(F)Minnesota - Minn. Stat. Ann. §§400.16, 400.161; §514.67;

(G)New Jersey - (as required by the Commissioner) "This endorsement will not insure against liens arising pursuant to the Spill Compensation Control Act. N.J.S.A. §58:10-23.11 et seq. subsequent to the issuance of this policy;"

(H)South Carolina - S.C. Code Ann. §48-1-350.

THE SHORT FORM LOAN POLICY INCORPORATES THE ALTA LOAN POLICY BELOW. YOU DO NOT NEED TO ADD A POLICY JACKET.

SUBJECT TO THE EXCEPTIONS FROM COVERAGE CONTAINED IN SCHEDULE B BELOW, AND ANY ADDENDUM ATTACHED HERETO, STEWART TITLE GUARANTY COMPANY, A TEXAS CORPORATION, HEREIN CALLED THE "COMPANY", HEREBY INSURES THE INSURED IN ACCORDANCE WITH AND SUBJECT TO THE TERMS, EXCLUSIONS, CONDITIONS AND STIPULATIONS SET FORTH IN THE AMERICAN LAND TITLE ASSOCIATION LOAN POLICY (10-17-92), ALL OF WHICH ARE INCORPORATED HEREIN. ALL REFERENCES TO SCHEDULES A AND B SHALL REFER TO SCHEDULES A AND B OF THIS POLICY.

SCHEDULE B

EXCEPTIONS FROM COVERAGE AND

AFFIRMATIVE ASSURANCES

YOU DO NOT NEED TO ADD EXCEPTIONS TO RESTRICTIONS, EASEMENTS OR MINERALS. THEY ARE GENERALLY EXCEPTED BELOW. THE POLICY ALSO PROVIDES AFFIRMATIVE INSURANCE AS TO THOSE ITEMS. FLORIDA USES A MODIFIED SCHEDULE B. This policy does not insure against loss or damage (and the Company will not pay costs, attorneys' fees or expenses) which arise by reason of the matters set forth below, except to the extent that the Company does insure in accordance with and subject to its terms against loss or damage which the insured shall sustain by reason of any inaccuracies in the affirmative assurances set forth below, except as limited in any addendum attached hereto:

1. Those taxes and special assessments which become due and payable subsequent to Date of Policy. DO YOUR NORMAL TAX AND ASSESSMENT SEARCH. VERIFY THAT TAXES AND ASSESSMENTS ARE PAID CURRENT.

2. Covenants, conditions and restrictions, if any, appearing in the public records. This policy insures that the same have not been violated, except that such affirmative assurance does not extend to covenants, conditions and restrictions relating to environmental protection unless a notice of a violation thereof has been recorded or filed in the public records and is not referenced in an addendum attached hereto. Further, this policy insures that future violation of any covenants, conditions and restrictions appearing in the public records, including any relating to environmental protection, will not result in a forfeiture or reversion of title and that there are no provisions therein under which the lien of the insured mortgage can be extinguished, subordinated or impaired. VERIFY PROPERTY OWNER'S ASSESSMENTS ARE PAID CURRENT UNLESS SUBORDINATE TO THE MORTGAGE. VERIFY NO REVERTER, UNLESS SUBORDINATE TO THE MORTGAGE. IF THERE ARE KNOWN EXISTING RESTRICTION VIOLATIONS, INSURE IF AUTHORIZED OR WILLING TO DO SO.

3. Any easements or servitudes appearing in the public records. This policy insures that none of the improvements encroach upon the easements and that any use of the easements for the purposes granted or reserved will not interfere with or damage the improvements, including lawns, shrubbery and trees. YOU DO NOT NEED TO REQUIRE A SURVEY IN ESTABLISHED SUBDIVISIONS, UNLESS YOU ARE AWARE OF COMMON SURVEY PROBLEMS OR STATE LAW REQUIRES A SURVEY. IF THERE ARE KNOWN ENCROACHMENTS, INSURE IF AUTHORIZED OR WILLING TO DO SO. IF YOU ARE FURNISHED A SURVEY, REVIEW IT TO DETERMINE IF EXCEPTIONS MUST BE ADDED TO THE ADDENDUM.

4. Any lease, grant, exception or reservation of minerals or mineral rights appearing in the public records. This policy insures that the use of the land for residential one-to-four family dwelling purposes is not, and will not be, affected or impaired by reason of any lease, grant, exception or reservation of minerals or mineral rights appearing in the public records and this policy insures against damage to existing improvements, including lawns, shrubbery and trees, resulting from the future exercise of any right to use the surface of the land for the extraction or development of the minerals or mineral rights so leased, granted, excepted or reserved. Nothing herein shall insure against loss or damage resulting from subsidence. YOU DO NOT NEED TO REQUIRE SURFACE WAIVERS OF OUTSTANDING MINERALS. YOU MAY GIVE THIS COVERAGE, UNLESS KNOWN USE OF SURFACE FOR MINERAL DEVELOPMENT IN IMMEDIATE AREA.

5. This policy insures against loss or damage by reason of any violation, variation, encroachment or adverse circumstance affecting the title that would have been disclosed by an accurate survey. The term "encroachment" includes encroachments of existing improvements located on the land onto adjoining land, and encroachments onto the land of existing improvements located on adjoining land. YOU DO NOT NEED TO REQUIRE A SURVEY IN ESTABLISHED SUBDIVISIONS, UNLESS YOU ARE AWARE OF COMMON SURVEY PROBLEMS OR STATE LAW REQUIRES A SURVEY. IF THERE ARE KNOWN ENCROACHMENTS, INSURE IF AUTHORIZED OR WILLING TO DO SO. IF YOU ARE FURNISHED A SURVEY, REVIEW IT TO DETERMINE IF EXCEPTIONS MUST BE ADDED TO THE ADDENDUM.

ADDENDUM TO SHORT FORM RESIDENTIAL LOAN POLICY

ATTACH THE ADDENDUM ONLY IF YOU ADD SPECIAL EXCEPTIONS. YOU DO NOT NEED TO EXCEPT TO EASEMENTS, MINERALS OR RESTRICTIONS IN THE ADDENDUM. IF YOU ADD AN ADDENDUM, YOU MUST BE SURE IT ACCEPTABLE TO THE LENDER. OTHERWISE, YOU MAY NOT ISSUE THE POLICY.

[File Number: __________ ]

Addendum to Policy Number:

IN ADDITION TO THE MATTERS SET FORTH ON SCHEDULE B OF THE POLICY TO WHICH THIS ADDENDUM IS ATTACHED, THIS POLICY DOES NOT INSURE AGAINST LOSS OR DAMAGE BY REASON OF THE FOLLOWING:

 

THE POLICY MAY INSURE A FIRST LIEN. IF THERE IS A SUBORDINATE LIEN, YOU SHOULD MARK THE BOX IN SCHEDULE A ( X ADDENDUM ATTACHED), ATTACH THIS ADDENDUM, SHOW THE SUBORDINATE LIEN ON THIS ADDENDUM, AND THEN ADD "THE COMPANY INSURES THAT THIS [DEED OF TRUST, MORTGAGE OR LIEN] IS SUBORDINATE TO THE LIEN OR CHARGE OF THE INSURED MORTGAGE UPON THE ESTATE OR INTEREST COVERED BY THIS POLICY."

THE POLICY MAY INSURE A SUBORDINATE LIEN. IF THE INSURED MORTGAGE IS SUBORDINATE, YOU SHOULD MARK THE BOX IN SCHEDULE A (X ADDENDUM ATTACHED), ATTACH THE ADDENDUM, AND SHOW THE SUPERIOR LIEN ON THIS ADDENDUM.