Contracts for Sale

Standard Exception Topic

COS


Contracts for Sale

In some states, the Company may insure a contract purchaser if the Company’s requirements are met.

Requirements

Standard Exception Subtopic

COSR02

STG

12/01/1995
V 1

Proof of Forfeiture

Terms and provisions of Contract of Sale between ________________, Seller, and __________________, Buyer (recorded _______________). The Company requires for review a release in recordable form of the contract of sale by the Buyer or satisfactory evidence that the Buyer’s interest has been forfeited in accordance with requirements of the contract and applicable law. At the time the Company is furnished this item, the Company may make additional requirements or exceptions.
Comment: If you are informed or suspect that a known contract has been forfeited, use this requirement.

Standard Exception Subtopic

COSR03

STG

12/01/1995
V 1

Insuring the Contract – Review a Copy

The Company requires for review a copy of the contract for sale covering the land. At that time, the Company may make additional requirements or exceptions.
Comment: In order to insure a contract for sale, several conditions must be met.

See Underwriting Manual


Standard Exception Subtopic

COSR04

STG

12/01/1995
V 1

Possible Outstanding Contracts

The Company requires satisfactory evidence as to whether there are any outstanding contracts for sale on the land. At that time, the Company may make additional requirements or exceptions.
Comment: You may use this requirement if you suspect there are outstanding contracts for sale: condominium units in a construction loan or project sale; developer lots in an unimproved subdivision; other known circumstances of common contract financing.

Standard Exception Subtopic

COSR05

STG

12/01/1995
V 1

Requirement of Seller Consent to Transaction

Terms and provisions of contract for sale between ____________, seller, and ____________ buyer [recorded ____________]. The Company requires the Seller to consent to any transaction by the Buyer and to verify the contract is current and not in default.
Comment: Use this requirement if an insured contract will be mortgaged or assigned. In some circumstances, the Company will insure a mortgage of a contract interest.

See Underwriting Manual


Exceptions

Standard Exception Subtopic

COSX01

STG

12/01/1995
V 1

Contract Exception – Contract Not Insured

Terms and provisions of the contract for sale between ____________, seller, and ____________, buyer, [recorded ____________]. The Company does not represent the current ownership of this interest.
Comment: Use this exception to an outstanding contract if the Company is not insuring a purchaser.

Standard Exception Subtopic

COSX02

STG

12/01/1995
V 1

Contract Exception – Contract Insured

Terms and provisions of the contract for sale between ___________, seller, and _____________, buyer, recorded _____________.
Comment: Use this Schedule B exception when insuring the equitable interest of the buyer to purchase the title to the land under the contract. The contract or a satisfactory memorandum must be signed and acknowledged by the seller in accordance with state law and must be recorded.

See Underwriting Manual


Standard Exception Subtopic

COSX03

STG

12/01/1995
V 1

Seller’s Interest Assigned

The interest of the seller to receive payment under the contract was assigned to ___________ by assignment recorded ____________.
Comment: Add this exception if an insured or excepted contract has been assigned by the seller (in a sale or mortgage of the seller’s interest).

See Underwriting Manual


Standard Exception Subtopic

COSX04

STG

12/01/1995
V 1

Buyer’s Interest Assigned

The interest of the buyer under the contract was assigned to ____________, by assignment recorded ____________.
Comment: Add this exception if an insured or excepted contract has been assigned by the buyer.

See Underwriting Manual


Standard Exception Subtopic

COSX05

STG

12/01/1995
V 1

Possible Outstanding Contracts

Any and all unrecorded contracts for the sale and purchase of the land, or any part of said land, and the rights and interest of any and all parties under such contracts.
Comment: Use this exception if you suspect there are outstanding contracts: e.g., condominium units in a construction loan or project sale; developer lots in an unimproved subdivision; or other known circumstances of common contract financing.

Standard Exception Subtopic

COSX06

STG

12/01/1995
V 1

Recharacterization as a Financing Scheme

Any claim that the vesting of title in the insured is part of a loan transaction, or that the deed to the insured and/or the contract for sale referred to in Schedule B constitutes a mortgage or other security device.
Comment: A contract may be part of a financing scheme, particularly if the buyer previously conveyed title to the new seller. In such event, use this exception when insuring the fee owner.

Schedule A

Standard Exception Subtopic

COSS01

STG

12/01/1995
V 1

Description of Insured Contract

The equitable interest to purchase title to the land created by that land contract dated ____________ between _________, seller, and _____________, buyer, recorded ___________________.
Comment: Use this description of the contract if the Company insures the buyer’s interest.

 Judgment in:  ________ Court, ________ County;
 Amount:  $_____________,
 Perfected:  ___/___/____,
 Docketed: ___/___/____,
 Debtor:  _________________
 Creditor:  _________________,
 Attorney for Judgment Creditor ___________________.]

See Underwriting Manual