Bulletin: KY2017001

Date:
February 13, 2017
To:
All Kentucky Issuing Offices
RE:
UNDERWRITING - Priority of Buyer Judgment Liens vs. Purchase Money Mortgage

Dear Associates:

We have relied on the holding in Kentucky Legal Sys. Corp. v. Dunn, 205 S.W.3d 235 (Ky. App. 2006) to treat judgment liens against purchasers as subordinate to their purchase money mortgages. A new case, Hays v. Nationstar Mortg. LLC, NO. 2015-CA-000121-MR, rendered January 6, 2017 (attached), overturns the Dunn case.

The specific facts of the case did not involve a purchaser's lien, but rather a lien of the prior seller that had not been paid at closing. Though the facts are different than those in Dunn, the ultimate holding was to overturn Dunn. For that reason, all judgment liens against a prospective purchaser must be treated as having priority over the purchase money mortgage and must be paid. We will keep you updated should there be any further developments on this case.

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