Bulletin: GA2012002

Date:
March 26, 2012
To:
All Georgia Issuing Offices
RE:
Notice of Confirmation Action and other Suits Affecting Land

Dear Associates:

A Lis Pendens is a recorded legal instrument which serves as constructive notice by statute that an action or suit affecting a specified piece of real estate is pending in a federal or state court.  O.C.G.A. §44-14-610.  It is notice of a possible interest in the property and establishes a priority for the later interest in the property which dates back to the date of recording of the Lis Pendens.  See Bayview Loan Servicing, LLC v. Baxter , 301 Ga. App. 577 (2011).  Anyone who purchases the property while the suit is pending is affected by the terms of any subsequent judgment and decree.  Where no Lis Pendens is filed in the real estate records, actual notice of ongoing litigation affecting the property to be insured is as good as record notice.

COMPANY POLICY.  Where you have actual notice or record notice of ongoing litigation, Issuing Agents must carefully look at the contents of the court file to determine the exact nature of the interest in property.  It may be necessary to require a release of any Lis Pendens on your commitment or include the underlying action and notice as an exception on all policies of title insurance.  In Georgia, a Lis Pendens may be removed for the purposes of insurance as follows:

(1) Entry of a final judgment after the appeal period has expired; or

(2) Dismissal of the action with prejudice and expiration of the appeal period; or

(3) Stipulation by all the parties which is approved by the Court and a release of Lis Pendens is recorded.  Contact your local underwriter if you have questions regarding additional requirements or removal of any Lis Pendens affecting title to property.

 Confirmation Action For Deficiency Judgment

A foreclosing lender must institute a "confirmation action" against the borrower within 30 days of a foreclosure in order to proceed in collection of a deficiency.  O.C.G.A. §44-14-161.  In any confirmation action, the Court has the authority to rule on the validity of the foreclosure and order a resale based on noncompliance with the statutory procedures such as notice and advertisement.  An order denying confirmation and setting aside the foreclosure sale returns the borrowers to the position they held prior to the sale.  Therefore, Issuing Agents may not insure while a confirmation action is pending against the mortgagors and judgment is not yet final.  Review any final Order to determine if the Court ruled the foreclosure sale valid.  If a resale is required by the Court, the foreclosing lender will have to proceed from the beginning with a new foreclosure in compliance with Georgia law before we can issue any policy of title insurance. 

If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.

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:
None
Underwriting Manual:
11.24 Lis Pendens
Exceptions Manual:
Lis Pendens
Forms:
None