- June 30, 2010
- All New Jersey Issuing Offices
- NJ DOBI Bulletin 10-10 Short Sale Negotiations by Settlement Agents
The New Jersey Department of Banking and Insurance has issued Bulletin 10-10 addressing the propriety of communications between licensed title insurance producers and holders of liens against properties involved in short sale transactions. Specifically, DOBI has addressed communications and negotiations regarding short sale payoff amounts and terms. The Department advises that the 'Debt Adjuster' licensing requirements of N.J.S.A. 17:16G-2 shall not apply to title insurance producers where the following two factors are present:
- The licensed title insurance producer is attempting to obtain the release of prior liens and encumbrances so that title objections set forth in the title commitment may be properly disposed of and removed, so as to enable the owner to convey and buyer to receive marketable and insurable title; and
- The producer receives no additional consideration for engaging in such activity other than payment of sums as approved by the Commissioner of Banking and Insurance and as set forth in the NJ Manual of Rates and Charges upon the consummation of the insured transaction.
Accordingly, New Jersey issuing offices that choose to engage in the settlement process and who address the terms of clearance of lien items by 'short sale' are cautioned against charging any fees for such services outside of the scope of approved Rate Manual charges. The NJDOBI advises that producers who engage in activities within the statutory definition of 'debt adjuster' without being licensed as such are subject to fines and penalties.
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.
- Bulletins Replaced:
- Related Bulletins:
- FL2008002 Short Sale Transactions
- GA2008001 Short Sale Transactions
- IN2010002 Short Sales, Foreclosure Rescues and Flip Transactions
- MI2010002 Short Sale Transactions
- SLS2008005 Short Sale Transactions
- SLS2009005 Short Sales
- SLS2010004 Short Sales
- Underwriting Manual:
- Exceptions Manual: