Bulletin: NL000046

Date:
October 21, 1994
To:
All Issuing Offices
RE:
Mechanic's Lien Coverage - Construction Loans

Dear Associates:

Mechanic's lien coverage on a construction loan must be approved by a Senior Underwriter. If priority is not obtained under local laws, you must be certain that bills for labor and materials will be paid and we will require:

  • A summary of the transaction.

  • Information regarding the type of control over loan funds (lien waivers, disbursement control, etc.).

  • The proposed pending disbursement language (for review).

  • Financial statements and indemnifications from the owners (for our financial officers to review).

  • The name of the contractor, whether he is bonded, whether Stewart Title Guaranty is named as an obligee, whether he is subordinating to the insured loan.

  • Hard and soft costs of the transaction.

  • A copy of the loan agreement and the construction contract.

If priority under state law is based on an inspection, the inspection must be made on the date of recording and must be evidenced by a written report and photograph. You must retain the report in the file and fax a copy to us.

Refer to Underwriting Manual Section 12.12.16 for additional information on mechanic's liens.

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.

References

Bulletins Replaced:
None
Related Bulletins:
None
Underwriting Manual:
12.12 Mechanic's Liens
Exceptions Manual:
Mechanic's Liens (Statutory Liens for Services, Labor or Material)
Forms:
None