- October 30, 1989
- All Underwritten Companies
Forgery claims, once exposed, appear to be consistent in their nature of discovery;
it is easy to be a "Monday Night Quarterback". Accordingly, I would
bring to your attention a recent example of a discoverable forgery.
A review of the facts indicate that the record owner of the subject property
obtained a release of lien of an existing mortgage which was less than three
months of record. Subsequently, a new mortgage was placed of record and within
a few months a release of the subsequent mortgage was recorded. This process
of obtaining new mortgages and releases prior to any subsequent mortgages continued
for quite some time until there were six liens of record within five releases
having an aggregate indebtedness in excess of $800,000. The subject wrongdoing
party attempted to keep all mortgage payments current but eventually could not
maintain the cash flow required. In all instances different lenders, title companies
and closers were used and all documents appeared to be accurate and complete
including, but not limited to, the appropriate forms, seals, signatures and acknowledgments.
An alert examiner might question that mortgages were satisfied immediately prior
to new indebtedness for which the subject property was security. Customarily,
it is the proceeds of refinancing which would satisfy the then existing debt
so as to have satisfactions of mortgages dated on or after the refinance.
Based upon the above and foregoing, please alert those parties who review chains of title and examine title documents to bring to the attention of appropriate parties in your organization situations which appear suspicious or unusual, with particular reference to the satisfaction of mortgages. Do not hesitate, where you deem it appropriate, to contact a lender to confirm that the release of record is in fact valid. In the event that we can be of some assistance in this regard, please do not hesitate to contact us at your earliest convenience.
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:
- 6.36 Forgeries
- Exceptions Manual: