- January 08, 2009
- All Alaska, Nevada, Oregon and Washington Issuing Offices
- Equity Lines
On September 25, 2008 Stewart Legal Services issued Bulletin No. SLS2008015, which concerned line of credit and revolving credit mortgages. The Bulletin requires that the following language be included in the commitment when an equity line of credit is listed as an exception:
This mortgage secures an equity line of credit and/or revolving loan. The Company requires a satisfactory written statement from the existing lender confirming: (a) the payoff amount, (b) that the line of credit has been closed, and no further draws/advances will be permitted and/or the right to future advances has been terminated, and (c) agreeing to deliver a full satisfaction/release upon payment of the outstanding balance.
Many have you have expressed that the above requirements were impossible to meet since most payoff demands from lenders are automatically generated and that often we order the payoff through a computer system or by facsimile. Furthermore, even if you are able to speak with someone at the lender's office about the payoff, the lender has its own forms and procedures and is generally not willing to acknowledge in writing that the account has been closed or promise that a release will be filed upon payment.
Please note that the following language has now been approved for use instead of the language from Bulletin No. SLS2008015:
1. NOTE: THIS DEED OF TRUST SECURES AN EQUITY LINE OF CREDIT AND/OR REVOLVING LOAN. IN ORDER TO INSURE, THE COMPANY REQUIRES EITHER (A) SATISFACTORY EVIDENCE FROM THE LENDER THAT THE ACCOUNT HAS BEEN FROZEN OR CLOSED OR (B) EVIDENCE THAT ESCROW HAS SUBMITTED TO THE LENDER A LETTER SUBSTANTIALLY SIMILAR TO THE SAMPLE BELOW, SIGNED BY ALL BORROWERS ON THE ACCOUNT. THIS EVIDENCE MUST BE SUBMITTED TO THE COMPANY PRIOR TO RECORDING.
REQUEST TO CANCEL REVOLVING CREDIT LOAN
Dear ______________________________ :
Please freeze the loan amount to include only obligations incurred or draws I have made prior to and including the date of this letter under the terms and conditions of the above-numbered loan secured by the above-numbered mortgage or the surety instrument and cancel the revolving credit loan for future advances.
I agree to cease signing all checks and/or credit cards and/or drafts. I enclose all of the above which I have in my possession.
Loan/Account No.: ______________
For on-line viewing of this and other bulletins, please log onto 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:
- SLS2008015 Paying Off Line of Credit Mortgages
- Underwriting Manual:
- Exceptions Manual: