Bulletin: NL000023

Date:
April 06, 1993
To:
All Issuing Offices
RE:
Insuring Purchasers at Foreclosures

Dear Associates:

If you are insuring a purchaser at a foreclosure sale, you must do the following:

  1. Verify that all foreclosure requirements (including a final, non-appealable judgment in a judicial foreclosure) under state law have been met.

  2. Verify that the mortgagor is not in possession of the property. If the mortgagor is in possession when you issue your commitment, the commitment should contain the following exception:

    "Any rights, claims or interest of (the mortgagor) in the land or any claim that the foreclosure by (lender) is invalid."

  3. Except to any applicable right of redemption (e.g., State law; IRS; Agricultural Credit Act of 1987).

  4. In all states except New Mexico and Texas, you must add the following creditors' rights exception unless our guidelines on fraudulent transfers are met or unless you issue the 1990 or 1992 ALTA Policy:

    "Any claim, which arises out of the transaction creating the estate or interest of the insured, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws."

  5. If you are asked to delete the creditors' rights exception or exclusion (where allowed), please call our underwriting personnel.

If you are asked to insure the grantee of a deed in lieu of foreclosure, please consult our Underwriting Manual or underwriting personnel.

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:
12.32 Mortgage Foreclosures
Exceptions Manual:
Mortgages
Forms:
None