Bulletin: SLS2012008

Note: This Bulletin has been replaced by Bulletin SLS2013006 . Use it for reference only.

Date:
May 17, 2012
To:
All Issuing Offices
RE:
Creditors' Rights Coverage for the Current Transaction - Reminder

This Bulletin has been replaced with SLS2013006.

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.

EXHIBIT 1

CREDITORS’ RIGHTS EXCEPTIONS


 

A.  Creditors’ Rights Exception for Assignment Endorsement (Not necessary for ALTA Endorsement 10-06 (2-3-10) or 10.1-06 (2-3-10))

This endorsement does not insure against loss or damage, and the Company will not pay costs, attorneys' fees, or expenses, by reason of any claim that arises out of the transaction creating the assignment by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws that is based on:

     1.  the assignment being deemed a fraudulent conveyance or fraudulent transfer; or

     2.  the assignment being deemed a preferential transfer.  


B.  Creditors’ Rights Exception for Modification Endorsement (Not necessary for any ALTA Endorsement 11-06 or 11.1-06)

This endorsement does not insure against loss or damage, and the Company will not pay costs, attorneys' fees, or expenses, by reason of any claim that arises out of the transaction creating the Modification by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws that is based on:  

     1.  the Modification being deemed a fraudulent conveyance or fraudulent transfer; or

     2.  the Modification being deemed a preferential transfer except where the preferential
          transfer results from the failure

          a.  to timely record the instrument of transfer; or

          b.  of such recordation to impart notice to a purchaser for value or to a judgment or
          lien creditor.  


 

C. Creditors’ Rights Exception for U.S. Policy

Any claim, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors’ rights laws, that the transaction vesting the Title as shown in Schedule A, is (a) a fraudulent conveyance or fraudulent transfer or (b) a preferential transfer.


 

D.  Creditors’ Rights Exception for any Endorsement to an existing 1992 or 2006 Loan Policy that deleted the creditors’ rights exclusion or included a creditors’ rights endorsement (such as the ALTA Endorsement 21-06)

 

This endorsement deletes any creditors’ rights coverage arising out of the transaction creating the lien of the Insured Mortgage previously given by endorsement.  


 

E.  Creditors’ Rights Exception for any Endorsement to an existing 1992 or 2006 Owner’s Policy that deleted the creditors’ rights exclusion or included a creditors’ rights endorsement (such as the ALTA Endorsement 21-06)

This endorsement deletes any creditors’ rights coverage arising out of the transaction vesting title in the Insured previously given by endorsement.  


 

F.  Creditors’ Rights Exception for any Endorsement to an existing 1970 Loan or Owner’s Policy

Any claim by reason of the operation of federal bankruptcy, state insolvency, or similar creditors’ rights laws, that the transaction creating the interest of the Insured is (a) a fraudulent conveyance or fraudulent transfer, or (b) a preferential transfer.