- October 16, 2007
- All Issuing Offices
- Insuring Around, Over, or Against Outstanding Enforceable Recorded Defects, Liens, and Encumbrances
Please note that our Underwriting Agreements typically provide the following or similar language:
“COMPANY (the issuing agent) shall not without UNDERWRITER's prior written consent insure over a title defect, lien, or encumbrance, regardless of any indemnity or deposit that COMPANY shall obtain.”
Underwriting Agreements also provide that our instructions and guidelines must be met.
For purposes of the Underwriting Agreements, “insuring over” includes issuance of a policy where (1) no exception is made to the lien, or (2) the policy insures against enforcement or foreclosure of the lien, or (3) the policy insures that the lien is subordinate, even though the lien is not clearly subordinate by express written subordination agreement or applicable law.
You should not insure over an outstanding enforceable recorded lien, such as a mechanic’s lien claim or mortgage, unless you receive approval or written instructions from Stewart Underwriting Personnel. Failure to comply with this instruction may result in loss under our title insurance policies and will then result in liability under your Underwriting Agreement. You also should not insure over any other outstanding title defect or encumbrance unless you receive approval or written instructions from Stewart Underwriting Personnel or you insure in accordance with Stewart Guidelines.
If you want to insure over an outstanding lien based on an indemnity from a title company, then (1) the indemnity must be issued by a title insurance company (not by a title insurance agent), and (2) the indemnity and your title commitment showing the lien must be submitted to Stewart Underwriting Personnel for approval and instructions. In some states, Stewart Underwriting Personnel have approved Master or Blanket Indemnities from other title insurers. If a Master or Blanket Indemnity is applicable, please comply with the written instructions from Stewart Underwriting Personnel.
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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.