- April 24, 2001
- All Issuing Offices in Maryland
- Releases of Mortgages/Deeds of Trust by Title Agents
In a memo dated February 16, 2001, the Maryland Land Title Association (MLTA) advised its agent members to consult with their title insurance underwriters regarding the underwriter's position with respect to the practice of title insurance issuing agents ("title agents") or title insurance issuing attorney/agents ("title attorney(s)") executing releases of mortgages/deeds of trust as an "agent" of the lender/noteholder. We have seen more and more of these releases in recent months and have received several inquiries regarding their validity.
While clearly a debatable issue, it is the position of Stewart Title Guaranty ("Stewart Title") that the release statute (RP §3-105), as it is currently written, does not allow title agents or title attorney(s) to execute releases on behalf of the noteholder unless there is an express, written authorization to do so. Accordingly, Stewart Title is requesting that our title agents and title attorney(s) refrain from executing releases as an "agent" of the noteholder unless the title agents or title attorney(s) has obtained written authorization from the noteholder. Additionally, when clearing title, title agents and title attorney(s) are advised not to rely on a release executed by title agents or title attorney(s).
The Legislative Committee of the MLTA has proposed legislation that would clearly authorize title agents and title attorney(s) to execute releases under certain circumstances and after certain requirements have been met. The bill (House Bill 925) contains provisions similar to the cancelled check release section of 3-105, in that it requires notification to the lender, a waiting period, and an affidavit by the title agents or title attorney(s). It does not appear that this Bill will pass during the current legislative session, but will probably be re-introduced in the next legislative session after additional research and debate. Until this Bill becomes law, Stewart Title encourages our title agents and title attorney(s) to use other existing methods (including the cancelled check method) for obtaining releases.
If you have any questions regarding this matter, please fill free to contact Joe Blume or Rick Harvey at (410) 547-9100.
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.