- January 05, 2001
- All Issuing Offices in Virginia
- Mechanic's Liens Procedures Revision
Stewart Title is pleased to announce revised procedures for agents to provide affirmative mechanic's lien coverage on certain types of construction loans and outsales, to streamline and simplify the process. For construction loans, the following are the requirements:
MUST be MLA posted site
Residential, 1-to-4 family (even if acreage parcel)
Licensed General Contractor (Not the homeowner)
The construction loan can not be a "revolver" (with additional lot take-downs) to use this procedure.
If the transaction qualifies with all of the above characteristics, you may offer affirmative mechanic's lien coverage on the construction loan without submitting a request for approval prior to closing providing that you:
Maintain a log, which we will supply to you, and submit the log on a monthly basis with your title policy reports, either in hard copy or electronically;
Follow all of Stewart's established mechanic's lien procedures, including: (1) having the Indemnity Agreement signed by the Owner, General Contractor, and any Guarantor; and, (2) attach copies of the Stewpend/Stewend endorsements to your title commitment; and,
You must continue to monitor the draws as before, doing title continuations and obtaining and retaining certifications from the MLA.
You may also provide affirmative mechanic's lien coverage on outsales without obtaining prior approval, provided the property is a 1-to-4 family residence, the general contractor is state-licensed, and the site was MLA posted. As with the construction loan, you must keep a log, to be remitted monthly, and follow our standard outsale procedures, including obtaining and retaining the Builder/Developer Statutory Payment Affidavit and a final certificate from the MLA.
We will no longer require the Indemnity Agreements be sent in monthly. You will now retain the original in your file.
If the transaction is disqualified for streamline approval for non-compliance with any one of the above requirements, you must submit the usual request for approval to your local office. Again, this program may not be used for revolving credit construction loans which have lot take-down features, regardless of the number of lots that may be encumbered at any one time. However, the outsale procedure may be used on subdivisions even if the original construction loan would not have qualified under this program.
Forms are also available on disk or by e-mail. Contact your local office.
Continued participation with this streamlined procedure is conditioned upon accurate record-keeping and monthly log remittance by the agent.
Please contact the Virginia District Office for a copy of above referenced log.
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:
- VA000004 Revisions of Virginia's Statutes Concerning Mechanic's Liens including the Mechanic's Lien Agent
- Underwriting Manual:
- 12.12 Mechanic's Liens
- Exceptions Manual: