Bulletin: IN2010009

Date:
October 14, 2010
To:
All Indiana Issuing Offices
RE:
Insuring At or After Mortgage Foreclosure - Indiana Specific Questions

Dear Associates:

On October 7, 2010, Stewart Legal Services issued Bulletin SLS2010021 setting forth underwriting guidelines for insuring at or after mortgage foreclosures as a result of possible errors in foreclosures and suspension of foreclosures by certain institutional lenders/servicers. The following addresses specific questions that have arisen with respect to issuance of the Indiana Foreclosure Guarantee and how to verify that a mortgagor or other parties such as tenants have vacated the property.

1. Are there any special requirements or exceptions that need to be included when issuing the Indiana Foreclosure Guarantee to lenders initiating foreclosure in addition to the standard underwriting guidelines for issuing the Guarantee?

The foreclosure guarantee should include an exception for "Any rights, claims, or interest of (the mortgagor) in the land or any claim that the foreclosure by (lender) is invalid" as set forth in paragraph no. 2 of SLS2010021.

2. What is acceptable verification that the mortgagor or other parties such as tenants under prior leases are not in possession of the property?

A certification by the Lender on an REO property may be sufficient. Paragraph no. 10 of SLS2010021 requires Underwriter approval to insure a purchaser or lender at foreclosure sale. Contact underwriter for approval and acceptable form for certification.

3. Are you obligated to issue an owner's policy to a lender who has obtained an Indiana Foreclosure Guarantee?

No. Foreclosure Guarantee Schedule B requirement no. 2 requires "Completion of the Foreclosure satisfactory to us of the mortgage shown in Schedule A, Item 5". Satisfactory completion of the foreclosure incorporates all the underwriting requirements set forth in SLS2010021.

If you have questions relating to this or other bulletins, please contact your local underwriting personnel or Stewart Legal Services.

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.

References

Bulletins Replaced:
None
Related Bulletins:
SLS2010021 This bulletin has been replaced.
Underwriting Manual:
None
Exceptions Manual:
None
Forms:
None