- September 23, 1992
- All Issuing Agents
- Stewart Title Guaranty Company Bulletin No. All 7-7/92 re. Judgment Liens
As you are no doubt aware, both the Resolution Trust Corporation ("RTC") and the Federal Deposit Insurance Corporation ("FDIC") have set forth their respective statements as it relates to requiring consent pursuant to 12 U.S.C. 1825(b)(2), in situations where they hold subordinate judgment liens to a superior mortgage. As set forth in Stewart Title Guaranty Company Bulletin No. All 7-7/92 re: Judgment Liens, it will be company policy to require specific consent by the FDIC to a senior lien foreclosure. There will be no similar requirement for an RTC judgment lien. This memo will address certain issues that are raised both in the foreclosure context and policy context.
Trustee Sale Guarantee
Pursuant to California Civil Code Section 2924B(c), judgment lien creditors are not required to be sent notice of a senior lien foreclosure. Therefore, it has been standard practice not to include the names and addresses of the judgment creditors on the Information for Trustee page. Some of the offices, however, do provide the names and addresses to the trustee as a courtesy notice only. With the requirement of the FDIC as noted above it will now be required that judgment liens be searched and reported if they are against the vestee and in favor of the FDIC. To determine if an institution is an FDIC institution, please review the attachment to Stewart Title Guaranty Company Bulletin No.All 7-7/92.
In situations where it is not clear from the record as to whether the FDIC has an interest as a judgment creditor, the above procedures should be complied with for all institutional lenders set out as a judgment creditor unless the title officer has independent knowledge that the institution is not involved in a receivership or conservatorship with the FDIC.
Policy of Title Insurance
Prior to issuing any evidence of title following a foreclosure sale and a trustee's deed upon sale, the title officer should satisfy themselves that consent was provided by the FDIC in situations where they held a junior interest as a judgment lien creditor to the foreclosing deed of trust. If consent is undeterminable, the judgment in favor of the FDIC shall be continued to be shown in Schedule B.
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:
- Underwriting Manual:
- 12.32 Mortgage Foreclosures
- Exceptions Manual:
- CA Mortgages