Bulletin: NL000040

Date:
July 19, 1994
To:
All Issuing Offices
RE:
Closing Instructions\Closing Representation

Dear Associates:

Your agency may be liable for verbal representations and closing instructions that fall outside the scope of title insurance. The underwriter does not protect the issuing agency or the insured on these problems.

Closing Instructions:

Closing instructions may ask that you represent a lender has a first lien; or "you made a thorough examination of title, and the commitment (binder or policy) truly reflects the title".

We suggest that you:

  • decline to sign the closing instructions; or

  • send amended closing instructions to the lender prior to closing that delete these provisions and state that the rights of the parties will be defined by the policy to be issued; or

  • agree (if true) that the lien will be insured as a first lien subject to the terms of the policy.

You must make the final decision on how to respond. However, your underwriting contract does not cover these matters.

Title Representations

After you issue a commitment, the customer may be asked whether a matter or exception is "satisfied" or whether it "doesn't apply." When you answer, do not say:

"You're safe"
"It's okay"
"It's clear"
"It doesn't apply"
"No problem"

By these answers, you may be subject to non-policy liability.

Instead, we suggest that you say: "we will be willing to issue our policy without exception" or "we will insure against loss under the policy terms (by reason of the matter)".

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:
5.16 Escrow Closings
Exceptions Manual:
None
Forms:
None