Bulletin: VA2022001
Dear Associates:
On February 4, 2022, the Bureau of Insurance (BOI) issued Administrative Letter 2022-01 (the “Letter”) addressing the practice of “split settlements”. In response to numerous inquiries and requests for clarification, the BOI issued Frequently Asked Questions (“FAQs”) regarding “Split Settlements” on February 16, 2022 (see attached copy).
The Letter and FAQs apply to Title and Settlement Agents (TSA’s) pursuant to the Virginia Real Estate Settlements Act, Section 55.1-900 et seq. and the Real Estate Settlement Agents Act, Section 55.1-1000 et seq. Per the Letter and FAQs, TSA’s must promptly review their policies regarding split settlements to ensure compliance with applicable laws and regulations.
The purpose of this Bulletin is to outline Stewart Title’s underwriting requirements as they relate to any settlement in which the purchaser or lender will be insured by a Stewart policy and/or in which Stewart Title will be issuing an Insured Closing Letter.
The Letter and FAQs appear to contemplate a seller or TSA engaging third parties to perform escrow, closing or settlement services. Regardless of whether such third-party engagement occurs, Stewart Title requires that Stewart agents acting as the buyer’s TSA obtain payoffs for any and all deeds of trust, judgments, taxes, dues and other liens and assessments directly from the creditor or other party to be paid, and upon closing remit all such payoffs directly to said creditor or other party as shown on the settlement statement. Stewart Title agents may not rely upon or delegate to the seller’s attorney, representative or other third party the responsibility to obtain or remit such payoffs on transactions to be insured by a Stewart Title policy of insurance or involving a Stewart Title Insured Closing Letter.
Please contact a Stewart Title underwriter if you have any questions regarding Stewart’s underwriting requirements for handling payoffs of liens or assessments necessary to insure title.
If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.
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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.