- February 25, 2013
- All South Carolina Issuing Offices
- RATES AND/OR FORMS UPDATE - Closing Protection Letters
Section 38-75-1010 of the Code of Laws of South Carolina went into effect on June 11, 2012, which provides that a title insurer may issue closing or settlement protection to a person who is a party to a transaction in which a title insurance policy will be issued. The statute provides that the coverage of such closing protection is against:
(1) theft or misappropriation of settlement funds in connection with a transaction in which a title insurance policy will be issued by or on behalf of the title insurer issuing the closing or settlement protection, but only to the extent that the theft relates to the status of the title to that interest in land or to the validity, enforceability, and priority of the lien of the mortgage on that interest in land; or
(2) failure to comply with the written closing instructions when agreed to by the settlement agent, title agent, or employee of the title insurer, but only to the extent that the failure to follow the instructions relates to the status of the title to that interest in land or the validity, enforceability, and priority of the lien of the mortgage on that interest in land.
The charge for the Closing Protection letter as set forth in Item 15 of the South Carolina Schedule of Charges and Forms is $15.00. Under the code provision cited above, the premium for the letter may not be split with an agent or other party. Therefore, the entire closing protection fee should be remitted to Stewart Title Guaranty Company. The agent should remit the closing protection letter fees separately from the title insurance premium.
The Closing Protection Letter fee shall be collected for all letters issued on or after April 1, 2013.
CPL CHARGES, THE GFE AND THE HUD SETTLEMENT STATEMENT
The new CPL fee will affect Good Faith Estimate calculations. We recommend that you contact your lender clients and begin making those adjustments. As to the placement of the CPL fees on the HUD-1, it is our opinion that the CPL fee(s) will go in the 1100 series on the HUD-1. The fee for the lender’s CPL can be shown on a blank line in the 1100 series “out of column” labeled “Lender CPL to Stewart Title Guaranty”. Whether or not the Lender’s CPL is reflected on a blank line, the charge for the Lender’s CPL must be included in the total charges in line 1101. For the fee for issuance of a CPL to the buyer or the seller, the fee will be shown on a blank line in the 1100 series and placed in the column for either the buyer or seller, as the case may be depending upon to whom the CPL is issued. The total charges for all CPLs issued for the transaction are to be included in the amount shown on line 1108 as “Underwriter’s portion of the title insurance premium”.
Softpro and Landtech have been provided with the new rate information. Please contact your software company to request an update for your system with the new rates as follows: Softpro – 1-800-848-0143 and Landtech – 1-800-835-1523. If you are currently utilizing StewartDocs or AIM, please contact a Stewart Technology representative to update your system at Customer Care Center –1-888-826-3282.
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.