Bulletin: NJ2010001

Date:
April 20, 2010
To:
All New Jersey Issuing Offices
RE:
Closing Service Letters
Dear Associates:
The Company assumes significant liability under Closing Service Letters (CSL's). Subject to its terms and the Conditions and Exclusions as set forth in the Letter, a CSL in New Jersey provides lender coverage for loss arising out of:
1. Failure of the Issuing Agent or Attorney to comply with written closing instructions to the extent that they relate to (a) the validity, enforceability and priority of the lien of the insured mortgage including obtaining documents and disbursement of funds; or (b) the collection and payment of funds due the lender; or
2. Fraud or misapplication by the Issuing agent or Attorney in handling lender funds.
Extreme caution must be exercised when issuing a CSL to avoid or minimize the potential exposure resulting from financial or professional misconduct. By following the rules for issuing CSL's as set forth below, New Jersey issuing agents will make a substantial contribution toward reducing the incidence of CSL claims and further the Company goal of eliminating these type of claims completely:
Instructions for issuing a CSL:

1. CSL's may only be issued in the name of a Policy Issuing Agent of Stewart Title Guaranty Company ("Stewart") or an attorney on the list of Approved Attorneys of Stewart as the closing/settlement agent. CSL's may not be issued in the name of a settlement company.

2. CSL's may only be issued to financial institutions, mortgage bankers and mortgage brokers licensed to originate first or second mortgage loans in New Jersey. CSL's may not be issued to individual lenders or any unlicensed lending entity.

3. CSL's may only be issued for specific transactions. If you are requested to issue a "blanket" CSL covering multiple transactions, please contact your local underwriting personnel.

4. CSL's may only be issued simultaneously with the issuance of a Stewart commitment to insure. No CSL may be issued where no title insurance is contemplated.

5. CSL's may not be issued in the name of the insured lender's counsel unless that counsel is a Stewart Approved Attorney, without prior written approval from local underwriting personnel.

6. CSL's may not be issued for transactions involving owners, officers, or employees of a title agency as parties to the transaction, or naming an approved attorney as closing agent where the attorney is also party to the transaction (buyer, seller or borrower) without prior written approval from local underwriting personnel.

7. You may only issue one CSL per transaction. If there is a change in lender, the prior letter must be cancelled in writing before issuing a new letter. If an existing letter must be amended, clearly state on the amendment that it is a revision of a prior letter.

8. CSL's must contain the full name of the issuing agency including the agency's Stewart ID number.

9. The complete lender's name, mailing address and loan number must be shown on the CSL's. You may not issue a letter with only the lender's name.

10. CSL's may only be countersigned by licensed personnel authorized to sign commitments and policies on behalf of Stewart.

Should an Issuing Agent have any reason for concern as to the proper conduct of an Approved Attorney, a CSL should not be issued. Under those circumstances, local underwriting personnel should be contacted. Examples of reason for concern could include but not be limited to an Approved Attorney who:

a. closes without ordering rundowns;
b. does not file Notices of Settlement;
c. fails to record deeds and mortgages on a timely basis;
d. does not pay the title invoice promptly after closing;
e. does not provide required documentation from a closing;
f. is difficult to reach or has ‘mailbox is full' messages on their phone system;
g. appears unable to properly staff his/her office;
h. fails to comply with lender's closing instructions;
i. fails to promptly attend to the discharge of paid lien items; or
j. exhibits any unprofessional conduct or unusual behavior.
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:
NJ000003 This Bulletin has been replaced by NJ2010001.
 
NJ000031 This Bulletin has been replaced by NJ2010001.
 
NJ000039 This Bulletin has been replaced by NJ2010001.
Related Bulletins:
None
Underwriting Manual:
None
Exceptions Manual:
None
Forms:
NJ Closing Service Letter