- December 07, 2009
- All Issuing Offices
- Special Alert - AmTrust Bank
On Friday, December 4, 2009, AmTrust Bank, located in Cleveland, OH was closed by the Office of Thrift Supervision (OTS), and the Federal Deposit Insurance Corporation (FDIC) was named Receiver.
The FDIC entered into a purchase and assumption agreement with New York Community Bank, located in Westbury, New York. AmTrust Bank had total assets of approximately $12 billion. New York Community Bank agreed to purchase approximately $9 billion of those assets. The FDIC will retain the remaining assets for later disposition.
We anticipate a period of uncertainty while the situation is sorted out, and the FDIC specifies the assets (loans and properties) that will be transferred and those that will be retained. Closings may be delayed or canceled. You should not rely upon any documentation (payoff letters, closing instructions, loan documents) sent to you by AmTrust on or before Friday, December 4, 2009.
A Question and Answer Guide on the FDIC's web site contains some information. Click here for the Question and Answer Guide as it exists today.
Origination of New Loans by AmTrust
In response to a related question describing SBA loans, the FDIC's Question and Answer Guide states: "The FDIC as Receiver for AmTrust Bank will not be originating any new loans." The Q&A Guide doesn't provided guidance regarding loans in progress. It states: "Please contact your loan officer directly."
If you have a pending loan from AmTrust, please contact the AmTrust loan officer and attempt to ascertain the status of the loan. If there is an indication that a pending loan will close, you must obtain new closing instructions dated on or after Monday, December 7, 2009. In addition, please obtain written confirmation that the loan documentation is current (i.e., the name of the lender stated on the documentation, etc). As a reminder, funding must be accomplished only by federally wired funds to your escrow account. You must confirm with your bank that the funds have been received (not just that the wire has been initiated) and unconditionally credited to your account prior to making any disbursements, recording any documents, or issuing any title policies.
Payoffs to AmTrust
With respect to existing loans, the Q&A Guide states: "Most loans have been assumed by New York Community Bank. However, all nonperforming single family residential loans, acquisition development and construction loans, and land loans are currently owned by the FDIC and are being serviced by all of the same personnel with whom you have worked in the past. All prior contacts remain the same for all loans."
At this time, we do not have information regarding the specific loans that will remain with the FDIC, as Receiver, and the loans that will be transferred to New York Community Bank. As a threshold matter, you must receive written confirmation from the FDIC, as Receiver, of the current status of a specific loan. The FDIC may designate current AmTrust employees to provide such confirmation.
In all cases, you must also receive a current payoff letter dated on or after Monday, December 7, 2009. Instructions regarding payoffs to AmTrust must come under the authority of the FDIC, as Receiver. If the loan is being transferred to New York Community Bank, you must receive a payoff letter from New York Community Bank and require an assignment of the mortgage from the FDIC, as Receiver, to New York Community Bank.
Real Property Owned by AmTrust
You should not insure property conveyed by AmTrust Bank. Such property should be conveyed, if at all, by the FDIC, as Receiver. This may involve a Power of Attorney from the FDIC, as Receiver.
If you have questions relating to this bulletin, please contact Stewart Legal Services or your local underwriting personnel.
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.
- Bulletins Replaced:
- Related Bulletins:
- SA2008035 AmTrust Bank - OTS Order to Cease and Desist
- SA2008036 AmTrust Bank
- SLS2008010 The Federal Deposit Insurance Corporation's (FDIC) role as Receiver and Conservator for failed banking institutions - Title implications for sales and loan payoffs
- SLS2009010 AmTrust Bank and Short Form Policy
- Underwriting Manual:
- Exceptions Manual: