- May 21, 2010
- All Texas Issuing Offices
- Acceptance of Instruction Letters
When you receive letters of instruction pertaining to closings, you may only execute the letter in the name of your title company. You may not execute the letter on behalf of Stewart Title Guaranty Company.
When reviewing lender instruction letters you must keep in mind Procedural Rule P-35 that reads as follows:
P-35. Prohibition Against Guaranties, Affirmations, Indemnifications, and Certifications.
No Title Insurance Company, Title Insurance Agent, Direct Operation, Escrow Officer, nor any employee, officer, director or agent of any such entity or person, shall issue or deliver any form of verbal or written guaranty, affirmation, indemnification, or certification of any fact, insurance coverage or conclusion of law to any insured or party to a transaction other than: (i) a statement that a transaction has closed and/or has been funded, (ii) issuance of an insured closing service letter, or any insuring form or endorsement promulgated by the State Board of Insurance, or (iii) certification of copies of documents as being true and exact copies of the original document or of the document recorded in the public records.
For example, the following acknowledgments of instructions are not acceptable for the following reasons:
a. They are signed on behalf of Stewart Title Guaranty Company when our agency relationship does not extend to escrow or settlement functions; and
b. They violate P-35.
We acknowledge receipt of this letter of instructions and the Escrowed Documents and advise you that all the Closing Conditions, other than the receipt of telephone or email authorization from _________ to proceed, have been satisfied, and we agree to comply with all the terms of the letter.
Dated: April ___, 2010.
STEWART TITLE GUARANTY COMPANY
STEWART TITLE GUARANTY COMPANY
By ABC Title Agency
Instead, the name of your title agency should be shown in the acceptance and acknowledgment:
We acknowledge receipt of this letter of instructions and the Escrowed Documents. We advise you that we have read and are familiar with the closing instructions contained herein and that we will follow and apply such instructions. This acknowledgment is made in compliance with Procedural Rule P-35 promulgated by the Texas Insurance Department.
ABC Title Company
The foregoing paragraph is just an example and is not mandated by Stewart Title Guaranty Company. However, it is a wise practice to add to any lender instructions or acknowledgment form that you are signing the instruction letter to the extent that it does not violate P-35.
According to Bulletin No. 155 (April 30, 1991) issued by the State Board of Insurance this Rule does not prohibit:
(i) the certification relating to disbursements on the HUD-1 by the settlement agent
(ii) acknowledgment of receipt of closing instructions. Among other things, this Rule prohibits "first lien letters" certifying the status of the lien at closing.
(iii) a title insurance agent or escrow officer from signing a statement that a set of standard instructions was read by and is familiar to the agent or escrow officer
(iv) a title insurance agent or escrow officer from following or applying standard closing instructions
The rule does prohibit:
(i) certification that proceeds were disbursed according to a special set of instructions or
(ii) that the escrow officer had personally closed according to special instructions.
If you have questions related to this bulletin, please contact your local underwriting counsel 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.
- Bulletins Replaced:
- Related Bulletins:
- MU2010004 Acceptance of Instruction Letters
- Underwriting Manual:
- TX 15.52.35 P-35. Prohibition Against Guaranties, Affirmatiions, Indemnifications, and Certifications.
- Exceptions Manual: