- June 01, 1994
- All South Carolina Agents
- Claims Alert: Builder's Warranty
Included within the coverage provided to a lender under an insured closing letter is the failure of the agent or closing attorney to comply with written closing instructions relating to the obtaining of documents. The District Office has on several occasions within the past year encountered the situation where the closing attorney failed to obtain a required warranty at closing covering the builder's workmanship and structural matters.
Obtaining the warranty after closing is, at best, burdensome, and sometimes can cause a substantial claim under the insured closing letter. A particular builder may not be enrolled in a warranty program and may be unable to qualify.
Without the warranty, the mortgage loan will not qualify for VA or FHA insured financing making a "buy-down" of the loan necessary.
In summary, the closing attorney should exercise caution in dealing with a VA or FHA loan involving new construction and comply with any builder warranty requirements before closing. Budd Matthews of the Home Buyers Warranty program would be pleased to assist you. He may be reached at 1-800-488-8814.
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.