- November 16, 2007
- California Issuing Offices
- Underwriting Bulletin Clarification
Since Bulletin SLS2007007 was distributed on October 16, 2007, there have been questions regarding when approval from an STG Underwriter or Senior Underwriter is required. Many are concerned about having to get STG Underwriter approval for writing over an unreconveyed deed of trust. I believe the question stems from the paragraph that reads:
“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.... 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.” (Emphasis added)
This matter was addressed during a conference call with Jim Gosdin, your California Underwriters and Collyer Church. I was referred to Management Bulletin MGT-56, issued also on October 16, 2007 dealing with Underwriting Authority. Attached to this Bulletin are the matters that are considered to be Extra-Hazardous Risks. Bullet point 3 reads:
“Insuring around outstanding enforceable unpaid liens unless proper bond, escrow of funds (for liens not exceeding $100,000 in the aggregate), or unless title insurer indemnity is secured (applicable to Underwriters and Associate Senior Underwriters).” (Emphasis added)
Therefore, in light of the above, if you have the situation where you want to eliminate a recorded deed of trust, if you determine by proper procedure that the note has been paid, the deed of trust is therefore not enforceable, and the amount is within your underwriting authority limits, you do not need to get approval from an STG Underwriter. (Emphasis added) This same procedure would apply to other unenforceable paid liens (except for mechanic’s liens) that fall within your underwriting authority limits.
For on-line viewing of this and other bulletins, log onto: http://www.vuwriter.com.
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:
- SLS2007007 Insuring Around, Over, or Against Outstanding Enforceable Recorded Defects, Liens, and Encumbrances
- Underwriting Manual:
- Exceptions Manual: