Bulletin: TX000053

Date:
December 27, 1999
To:
All Issuing Offices in Texas
RE:
Title Insurance Hearing Results

Dear Associates:

The Commissioner has approved several matters proposed at this year's title insurance hearing.

Reinsurance (Effective November 1, 1999)

The Commissioner adopted the most current (1994) ALTA Reinsurance Agreements. Our reinsurance department prepares these agreements generally on a transaction basis. If you have a question concerning reinsurance, please call Brandy Burkhardt at 1-800-729-1900, extension 8173, or Lynne Demarest at 1-800-729-1900, extension 8219.

POC Disclosure Form T-63 (Effective January 1, 2000)

The Commissioner adopted the Texas Escrow Accounting Addendum Special Disbursement Reconciliation Form (T-63). The settlement agent must now complete this form if the settlement agent disburses items paid outside of the closing (POC), such as mortgage broker (or yield spread premium) fees. Those items also must be shown on the HUD-1 as POC items. If you do not disburse the item, do not complete this form. You must still show the POC item (if known) on the HUD-1. The settlement agent must sign this form. The buyer, seller, and borrower are not required to sign this form. This Agenda item makes clear that the settlement agent may disburse POC items.

Amended Tax Exception (Effective as to Policies "Delivered or Issued for Delivery on or after January 1, 2000")

The Commissioner has amended the tax exception language on the Owner Policy (T-1; Schedule B, 5), Residential Owner Policy (T-1R; Schedule B, 5), Mortgagee Policy (T-2; Schedule B, 3), Commitment (T-7; Schedule B, 5), Binder (T-13; Schedule B-Part I, 3), and Limited Pre-Foreclosure Policy (T-40; Exception 1). The revised tax exception (with the new language underlined) is:

"Standby fees, taxes and assessments by any taxing authority for the year ___, and subsequent years; and subsequent taxes and assessments by any taxing authority for prior years due to change in land usage or ownership, but not those taxes or assessments for prior years because of an exemption granted to a previous owner of the property under Section 11.13, Texas Tax Code, or because of improvements not assessed for a previous tax year."

You may continue to delete the rollback tax language ("and subsequent taxes and assessments by any taxing authority for prior years due to change in land usage or ownership") from the tax exemption in the Mortgagee Policy or Binder if our requirements are met. If the tax search discloses:

(1) that existing improvements were not assessed for any years they were on the land; or

(2) that the seller had an improper "over 65" homestead exemption (for example, a child of a deceased former owner is selling but still carries the exemption); or,

(3) the land is vacant and/or rental property and the tax search shows a claim of homestead exemption, verify the possible additional taxes are paid for all applicable years, or call our underwriting personnel

Home Office ("Direct") Issue Changes (Effective January 1, 2000)

The Commissioner adopted an amendment to Rule P-31. The Rule allows the title insurer to designate its employees or officers, who are employed at its designated office addresses and who may countersign the directly issued policies. The Rule expressly allows the title insurer to have multiple designated offices for direct issues. Please continue to forward direct issues to our Home Office Issue Department at 1980 Post Oak Boulevard, Houston, Texas or to your district manager.

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.