- December 13, 1995
- All New York Managers, Office Counsel, Underwriters and Agents
- No Consideration Deeds and Intra-Family Transactions Revisited
Never, in the annals of title underwriting, has an Underwriting Bulletin NY000106 entitled No Consideration Deeds and Intra-Family Transactions Beware of Forgeries been read by so many, embraced and accepted by so few, and generated such impassioned response as our most recent one relating to no consideration deeds and intra-family transactions. It obviously touched a raw nerve among STIC Agents who indicated that the circumstances described in the Bulletin appear rather frequently in titles which they examine. From our perspective, there was a positive side to this episode in that it is very reassuring to know that the articles and bulletins prepared by Company Counsel are read and reviewed, and taken very seriously by our employees and agents. As a practical matter, however, a clarification of the earlier bulletin is, in this case, appropriate.
There is no question that we are very concerned about forgeries. Nor is there any question that "no consideration deeds" and/or &"intra-family deeds" are the types of transactions which, in our experience, have been fertile ground for fraud and/or forgery. The Company requires its employees and agents to exercise great caution when those deeds appear in a chain of title or are delivered at closing. Our strong preference is not to insure in such cases unless there has been at least one transaction, subsequent to the "no consideration" or "intra-family" deed, which has been insured by a title company (either directly or through its authorized agent).
However, there are factors that can be taken into consideration by an Agent or by the Company which would allow such titles to be insured. For example, if the attorney who supervised the execution of, or acknowledged the signature of the grantor on the deed in question is available, he could give an affidavit as to the identity of the grantor and the delivery of the deed. In the case of a transfer between spouses, the deed may have been given pursuant to a judgment of divorce, which authorized or required the conveyance in question. The production of such judgment could resolve our concern about the validity of the execution and the delivery of the deed.
The signature on the instrument in question could be checked against other instruments (if any) in the chain of title which contain the signature of the "no consideration" or spousal grantor. Or, where there has been a no consideration transfer (spousal or otherwise), an affidavit could be obtained from the grantor acknowledging and confirming delivery of the deed in question and setting forth the reason that the transfer was made without consideration.
The Company is willing to consider these and other proofs in determining whether to insure such transactions.
The Company underwriting position in this area is hereby modified to the extent that there is no specific prohibition against insuring such transactions. Instead, each transaction should be considered by an Agent on a case by case basis, and if the Agent is satisfied with the proofs provided, it may be insured.
If you have any questions concerning this bulletin, please contact Company Counsel.
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:
- NY000106 No Consideration Deeds and Intra-Family Transactions Beware of Forgeries
- Underwriting Manual:
- 6.36 Forgeries
- Exceptions Manual: