- April 01, 1997
- All Issuing Offices
- Claims Prevention
It is easier to prevent claims than to resolve them after they occur. The advantages of prevention are obvious and include: (1) happy customers; and, (2) less claims expense. Thus, to assist in claims prevention, periodically, the National Legal Department will issue bulletins addressing recent claims that have affected our industry.
Please discuss these bulletins with your associates.
To encourage everyone to be claims prevention conscious, Stewart Title Guaranty Company is implementing a reward program for claim prevention ideas beginning April 1, 1997. The rules are simple and are as follows:
- For each original and reasonable claim prevention idea received by the Claims
Prevention Counsel in the National Legal Department, Stewart Title Guaranty
Company, P. O. Box 2029, Houston, Texas 77252-2029, the person first submitting
the idea will receive $25.00.
- For each claim prevention idea that is published in a Claims Prevention
Bulletin, the first person to submit the idea will receive $25.00.
- For the best claim prevention idea received by the Claims Prevention Counsel
each month, the associate first submitting the idea will receive $50.00.
- This program may be discontinued at any time and all decisions of the Claims Prevention Counsel will be final.
Claims Prevention Idea
Payoff checks or wires must be made to the record holder (and collateral assignee, if any) of the debt. These payments should not be made to the servicing agent or other third party.
There have been a number of claims recently where the payoff checks were made payable to a third party who assured the closer that she/he would make the payment to the lender and obtain the necessary release of the liens. The payoffs were never made and the underwriter is now unable to locate the servicing agent or the funds.
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.