Bulletin: MI2010002

Date:
February 03, 2010
To:
All Michigan Issuing Offices
RE:
Short Sale Transactions

Dear Associates:

Short sale transactions (also known as short payoffs) may be locally referred to as 2-party or 3-party short sales. A 2- party short sale transaction involves a direct sale of the property to the ultimate purchaser. If a "negotiator" is employed by the seller to negotiate the sale for a fee, a line item should be reflected on the HUD for such fee. If requested to insure a 2-party transaction, please refer to existing company guidelines contained in Stewart Bulletins SLS2008005 and SLS2009005.

A 3-party short sale involves an a 3rd party -sometimes referred to as a "servicer" or "intervener" who not only negotiates the terms of the short sale with the underlying lender but will arrange to take title to the property before it is sold to the ultimate purchaser. There are always 2 transfers in a 3-party transaction. You may not insure a 3-party short sale transaction without written approval from a Michigan Underwriter on a file by file basis. Please review Stewart Bulletin SLS00234 on Loan Fraud.

This bulletin relates solely to Michigan.

If you have questions related to this bulletin, please contact your local underwriting personnel or Stewart Legal Services.

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.

References

Bulletins Replaced:
None
Related Bulletins:
SLS00234 Loan Fraud (Replaces both SLS00229 and SLS00230)
 
SLS2008005 Short Sale Transactions
 
SLS2009005 Short Sales
Underwriting Manual:
None
Exceptions Manual:
None
Forms:
None