Bulletin: NL000052

Date:
February 08, 1996
To:
All Issuing Offices
RE:
Federal Update

Dear Associates:

RTC Termination

The Resolution Trust Corporation (RTC) was terminated on December 31, 1995.

If the RTC was acting as receiver or conservator for a financial institution, the Federal Deposit Insurance Corporation (FDIC) succeeds to that position without need of separate deed.

All assets held by RTC in its corporate capacity (i.e., in its own name) vest in the FSLIC Resolution Fund without need of separate deed.

The FDIC manages the FSLIC Resolution Fund.

If FDIC succeeds to RTC, please request that the signature contain recitals of its succession (see Exhibit 1).

Interstate Commerce Commission And Railroads

The Interstate Commerce Commission has been replaced by the Surface Transportation Board (Board) of the Department of Transportation, effective January 1, 1996.

The Board must approve abandonment or discontinuance of railroad lines (except spurs and side tracks).

The Board may refuse to permit abandonment of railroad rights-of-way and may require continued use as public trails.

A federal court order or act of Congress also must approve abandonment of railroad rights-of-way that were fee or easement grants from the U.S.. In many cases, the railroad's interest will then vest in and should be deeded to adjoining owners or the municipality.

U.S. Judgment Liens

Federal law was amended May 29, 1991. It applies to judgments in favor of the "United States".

The "United States" includes federal corporations, federal agencies, federal departments, federal commissions, or other agencies or instrumentalities of the U.S..

A "United States" judgment does not include a judgment in favor of a savings and loan association or bank that is later taken over by the FDIC or RTC.

The United States judgment lien is effective for the longer of the period allowed by state law or 20 years.

This rule applies to United States judgments rendered on or after May 29, 1981.

A United States judgment lien against a purchaser may have priority over a purchase money mortgage and should be excepted in the Loan or Mortgagee Policy insuring the purchase money mortgage.

Other bulletins pertaining to this subject are NL000012 entitled, "Federal Debt Collection Procedures Act of 1990" and NL000013 entitled, "Judgment Liens".

Federal Tax Liens

Federal law was amended November 5, 1990.

It provides that a federal tax lien is effective for 10 years and 30 days from date of assessment.

The federal tax lien may be extended for an additional 10 years if it is refiled within the last year of the original 10-year and 30-day period.

You may rely on the "last stated date for refiling" of the federal tax lien as the termination date unless the lien is refiled.

Please refer to bulletin NL000026 entitled, "Federal Tax Liens" for additional information.

Federal Mortgages

Limitations

Mortgages held by the FDIC as receiver or conservator are enforceable for the longest of:

  • the period allowed by state law
  • 6 years after the RTC or FDIC became receiver or conservator
  • 6 years after the final maturity of the mortgage debt

Mortgages held by the "United States", such as the SBA, FmHA (Farmers Home Administration), Farm Credit Banks, FDIC corporate, and other federal agencies or instrumentalities, are not subject to any limitations, under state or federal law.

Federal Redemption

If a mortgage is held by an agency or instrumentality of the U.S., such as FmHA, a Farm Credit Bank, or SBA, the U.S. may redeem (under 28 U.S.C. 2410) the foreclosure of a prior lien for the longer of (1) redemption period under state law or (2) one year after foreclosure sale.

If a mortgage secured debt to VA, HUD, or FDIC, the valid foreclosure of a prior mortgage is subject to redemption by the U.S. only pursuant to state law.

FDIC Policy

If the FDIC, as receiver or conservator, holds a subordinate judgment or mortgage lien, it does not need to consent to foreclosure of a prior mortgage conducted in accordance with state law.

The FDIC must consent in writing to foreclosure of a prior involuntary lien (e.g., tax, judgment, or mechanic's lien) in order for the foreclosure to extinguish the FDIC lien.

Please refer to Bulletin NL000013 entitled, "Judgment Liens", Bulletin NL000014 entitled, "FIRREA; RTC and FDIC; New FDIC Statement of Policy - Section Bulletin #ALL 7-7/92 (Replaces Bulletin ALL 3-5/92 dated May 18, 1992)" and Bulletin NL000028 entitled, "FIRREA; Subordinate Liens by RTC and FDIC" for additional information.

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.

EXHIBIT 1

MANDATORY GRANTOR/ASSIGNOR LANGUAGE
TO BE USED IN DOCUMENTATION CONVEYING FORMER RTC
REAL ESTATE-RELATED (REO AND MORTGAGES) ASSETS
FROM FDIC TO THIRD PARTIES

 

Where FDIC has succeeded RTC as Receiver, identify the Grantor/Assigner as:

1.

The Federal Deposit Insurance Corporation (FDIC) acting in its capacity as Receiver for [Association], which pursuant to 12 U.S.C. Section 1441a(m)(1) succeeded the Resolution Trust Corporation (RTC) in its capacity as Receiver for [Association]...

(if necessary, add recitals regarding title history of Association and appointment of RTC)

FEDERAL DEPOSIT INSURANCE CORPORATION
Receiver for [Association]

By__________________________________________
Name
Attorney-in-Fact

Where FDIC has succeeded RTC as Conservator, identify the Grantor/Assignor as:

2.

The Federal Deposit Insurance Corporation (FDIC) acting in its capacity as Conservator for [Association], which pursuant to 12 U.S.C. Section 1441a(m)(1) succeeded the Resolution Trust Corporation (RTC) in its capacity as Conservator for [Association]...

(if necessary, add recitals regarding title history of Association and appointment of RTC)

FEDERAL DEPOSIT INSURANCE CORPORATION
Conservator for [Association]

By__________________________________________
Name
Attorney-in-Fact

Where FDIC has succeeded RTC in its Corporate Capacity, identify the Grantor/Assignor as:

3.

The Federal Deposit Insurance Corporation (FDIC) acting in its capacity as Manager of the FSLIC Resolution Fund, successor in interest to the Resolution Trust Corporation (RTC) pursuant to 12 U.S.C. Section 1441a(m)(2)...

(if necessary, add recitals regarding title history of RTC as Receiver/Conservator, transfer to RTC Corporate, title history of Association, and appointment of RTC)

FEDERAL DEPOSIT INSURANCE CORPORATION
Manager of the FSLIC Resolution Fund

By__________________________________________
Name
Attorney-in-Fact

References

Bulletins Replaced:
None
Related Bulletins:
NL000026 Federal Tax Liens
Underwriting Manual:
6.08 Federal Tax Liens
 
10.08 Judgments
 
12.32 Mortgage Foreclosures
 
17.00 Railroad Right Of Way
Exceptions Manual:
Federal Tax Liens
 
Judgments
 
Railroads
 
Redemption by United States
Forms:
None