Bulletin: NE2012007

Date:
November 12, 2012
To:
All Nebraska Issuing Offices
RE:
Nonjudicial Foreclosures - Power of Sale; Nebraska

Dear Associates:

This is a reminder that, when insuring the interest arising under a trust deed/deed of trust in Nebraska, it is important to verify that the instrument itself actually provides for the power of sale.

Section 76-1005, Neb. Revised Statutes, requires that the power of sale be “expressly provided for in the trust deed.”

The absence of a power of sale provision in an instrument would negate the lender’s ability to foreclose nonjudicially in the event of a default, and to have to bear the added expense of a judicial foreclosure.

When asked to insure a new trust deed/deed of trust, either in a refinance or purchase transaction, the instrument itself must be examined to confirm the presence of a power of sale provision.

When asked to insure a title derived from a nonjudicial sale, agents should examine the underlying instrument to ensure that the power of sale provision is present.

In either instance, appropriate curative action must be required, or a relevant exception added to the commitment/policy. By way of example, such curative action could be a requirement that the instrument be redrafted or reexecuted, or judicial foreclosure be undertaken by the lender.

Also, please be reminded that a title insurance agent or agency does not have authority under Nebraska law to act as a trustee on a Nebraska trust deed/deed of trust, or to exercise the power of sale.

If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.

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