Bulletin: SLS00180

Date:
November 06, 2003
To:
All Issuing Offices
RE:
Native Americans/Indians: Title Insurance, Leasehold Loans, etc. - UPDATE
Dear Associates:

This is an update, with minor revisions, of the Company's requirements (1) for the issuance of loan policies for leasehold loans to Tribe members on Indian lands and (2) general requirements for title insurance involving Indian lands. These requirements are generally designed for loans on trust land and allotment land. Many of the requirements are also applicable to other Indian Country transactions, including Indian owned fee simple lands. They may be included as needed in a commitment. Please contact Stewart Legal Services if you have any questions.  Insuring forms for Native American lands and interests in Native American lands are available by contacting a Stewart Senior Underwriter.

Requirements:

1. Documentation must be furnished for review confirming that the Tribe, Band, Pueblo, Nation, Community, Village or other group ("Tribe") is a federally recognized Indian tribal entity.

 

(Comment: This documentation may be found in the Federal Register. Stewart Legal Services ("SLS") will furnish this information upon request.)


2. Furnish for review the existing organizational documents of the Tribe, Band, Pueblo, Nation, Community, Village or other group ("Tribe") such as Constitution, Charter, Bylaws, etc. ("Constitution"), and all amendments.

 

[An opinion by the Tribe's attorney may be requested to confirm the appropriate governing body. Additional requirements may be made as a result of the review of such documents.]

3. Furnish for review documentation confirming whether or not laws concerning lien priority, taxation of property, a tribal registry of documents, all or part of the uniform commercial code, or mechanic and materialmen liens have been adopted by the Tribe.

 

(Comment: An opinion letter by the Tribe's attorney addressing this issue will satisfy this requirement.)


4. If the transaction is commercial (does not involve individual borrowers or residential leaseholds) then furnish for review documentation, if any, confirming that the Tribe has granted in accordance with Tribal Law a limited waiver of sovereign immunity which encompasses the proposed transaction(s). Requests for a modification or deletion of this requirement should be forwarded to Stewart Legal Services in Houston.

 

[SLS has samples of limited waivers used by some Tribes. Such waivers appear in a tribal agreement, or a tribal law, ordinance, or resolution.]


5. Furnish for review documentation confirming that a mortgage foreclosure procedure law has been adopted by the Tribe:


a)authorizing foreclosure of mortgages by tribal law procedures; or, adoption of state foreclosure procedure;


b)reflecting that such law was adopted in compliance with the Tribe's laws;


c)designating the court or courts given jurisdiction over foreclosures; and,


d)determining whether the foreclosure law contemplates use of the state courts, and if so, confirming that the state has accepted jurisdiction or that the state's constitution or statutes do not disclaim jurisdiction over Indians and Indian lands.


6. If the Tribe's foreclosure law provides for foreclosure in tribal court, then furnish for review


a)documentation identifying the organization of the tribal court,


b)any tribal court procedural rules, and


c)any appeals procedure.


7. Furnish for review documentation confirming the Tribe does not prohibit title insurers from doing business on Indian lands or does not regulate the business of title insurance.

 

(Comment: An opinion letter by the Tribe's attorney addressing this issue will satisfy this requirement.)


8. The policy issuing agent should obtain or perform a customary search and examination of:


a)county land, tax, judgment, and court records as required by a lender;


b)tribal land, tax, judgment, and court records; and


c)other records systems if any, affecting the interest in the land,


d)if there are no tribal systems, and/or only some or part of these systems appear to exist for a Tribe, then review documentation from Tribe (tribal counsel or other Company approved authority) that describes what, if any, records exist.


9. The proposed borrower, lessee, Tribe, or lender should furnish to the policy issuing agent for review a current Bureau of Indian Affairs ("BIA") Title Status Report ("TSR") prior to issuance of a title insurance commitment and after recording of the mortgage.

 

(Comment: The policy issuing agent should include in the commitment and policy as is appropriate, the matters disclosed by the TSR.)


10. Furnish for review, if applicable, the agreement or memorandum of understanding ("Agreement") which is proposed or has been executed by:


a)Tribe, Federal National Mortgage Association ("Fannie Mae") or Federal Home Loan Mortgage Corporation ("Freddie Mac") and Lender and,


b)approved by the Department of the Interior.


11. Furnish for review, if applicable, the lease, residential ground lease or Homesite lease approved for use by the Tribe and BIA, or the recorded lease previously granted to the proposed mortgagor for the subject land.


12. Furnish for review, if applicable, the form of Mortgage approved by the Tribe and BIA; and,


a)the Addendum to fixed rate note, if any;


b)the Security instrument binder, if any; and,


c)any other forms agreed upon or to be used.


13. Furnish for review the tribal law, statute, ordinance, code, or resolution (and document same adopted in compliance with tribal law) which approved the authority of the tribal representatives executing all required documents and the transaction forms such as:


a)The agreement of the Tribe, Lender, the Department of the Interior, and Fannie Mae or Freddie Mac (for example, Tri-Party Agreement with Addendum and Rider or Memorandum of Understanding, or Tribal Agreement),


b)Lease;


c)Mortgage or Leasehold Mortgage; and,


d)Any deed.

 

(Comment: An opinion letter by the Tribe's attorney may satisfy the requirement for documentation of adoption in compliance with tribal law)


14. If survey coverage (deletion or modification of the standard survey exceptions) is requested, furnish the BIA land status map or other survey for review by the policy issuing agent.


15. If subdivided, determine if subdivided in compliance with tribal law. The policy issuing agent should obtain a survey or the subdivision plat. The Tribe or its' attorney should represent that no violation of tribal law or federal law has occurred in the subdividing process.

 

(Comment: SLS and the appropriate state or regional counsel or underwriter should be furnished copies to revise.)


16. The policy issuing agent should obtain an inspection and a Lessor's affidavit regarding parties in possession and mechanic liens. If a Tribal Law providing for mechanic liens exists no inspection or affidavit is required if the Tribe represents or it is otherwise documented that there are no parties in possession except Borrower and the property is unimproved or otherwise not subject to a mechanic and materialman's lien.

 

(Comment: SLS and the appropriate state or regional counsel or underwriter should be furnished copies to review.)


17. The execution of the transaction documents (Mortgage, Lease etc.) must be in the presence of a Notary Public:


a)The Notary must be acceptable to BIA and the Tribe; and,


b)If other than a state appointed Notary, the Notary's appointment and the ordinance, statute or resolution authorizing same must be furnished for review by the policy issuing agent.

 

(Comment: Company counsel or underwriters should be contacted if there is any question.)


18. Confirm that the transaction documents (such as Lease, Leasehold Mortgage, Mortgage etc) are recorded:


a)in BIA records;


b)in county land records if a lender requires; and


c)in tribal land records, if any.


19. Documentation of access must be confirmed by the policy issuing agent, including appropriate provisions in any lease, mortgage or agreement with the Tribe and Interior, or an exception to the right of access must be included unless Stewart underwriting approval is obtained.


20. Copies of all individual transaction documents, except pre-approved documents (leases, mortgages etc.) should be sent to the state/regional underwriting contact and Stewart Legal Services.


21. Insuring forms for Native American lands and interests in Native American lands are available by contacting a Stewart Senior Underwriter.


22. If the housing that is in place or will be added to the land is a manufacturing housing unit, then the guidelines for issuance of the ALTA Endorsement Form 7 should be satisfied, even if you are not requested to issue that endorsement. The endorsement may be issued if requested and if available in the policy issuing agents area.


23. Any matters revealed by any of the above which are objectionable to the Company will result in appropriate exceptions being included in the policy.


24. An attorney's opinion may be required by Stewart as part of any review and satisfaction of any requirement.

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:
NL000105 This Bulletin has been replaced by SLS00180
Related Bulletins:
NL000106 Native American/Indian Land - Policy Transaction Codes
Underwriting Manual:
9.08 Indian Titles
Exceptions Manual:
None
Forms:
None