Bulletin: UT2013002

Date:
September 16, 2013
To:
All Utah Issuing Offices
RE:
UNDERWRITING - Recon Trust as Trustee

Dear Associates:

JUDICIAL DECISIONS

For several years now a number of lawsuits challenging the authority of ReconTrust to conduct a trustee’s sale in Utah have been making their way through the state and federal courts. Some judges in the U.S. District Court for the District of Utah have ruled that ReconTrust, under the National Banking Act, may act as trustee and conduct non- judicial sales in Utah while other judges have ruled that Utah law controls and Recon Trust cannot act as a trustee to conduct a non-judicial sale.

Recently the Utah Supreme Court held that ReconTrust may not act as a trustee in Utah to conduct non-judicial foreclosure sales. (See Federal National Mortgage Association v. Sundquist, 2013 Utah 45 2013.) Because ReconTrust is neither an attorney licensed to practice law in Utah with an office in Utah or a title agency with an office in Utah, it cannot conduct non-judicial foreclosure sales (U.C.A. 57-1-21 and 57-1-23). As such, any non-judicial foreclosure sale where ReconTrust was the trustee may not be effective from July 23, 2013, forward.

COMPANY GUIDELINE

As a result of the Sundquist decision and the decisions from the federal bench, the law in this area is obviously not settled. In the event your examination of the chain of title reveals a non-judicial foreclosure sale conducted by ReconTrust, no policy of title insurance may be issued without underwriter approval.

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