- March 26, 2012
- All Texas Issuing Offices
- Short Sale Affidavits
The Texas Commissioner of Insurance has considered the question of the authority of title insurance agents and direct operations to sign so-called Short Sale Affidavits that require agents and direct operations to make representations and indemnities concerning the knowledge of parties to transactions, especially those transactions where the lender is not receiving full loan payoff. Freddie Mac agreed with the American Land Title Association to modify the form to remove title companies from making such representations and indemnities; however some lenders have not changed their letters or other forms.
Should you be requested to execute a short sale affidavit that contains representations or indemnities, you should seek counsel and consider providing the lender with a copy of this bulletin which provides the operative language from the Commissioner’s Order.
Commissioner’s Order 12-0217 dated March 19, 2012 states: Requiring title agents to execute short sale affidavits violates P-35 as written. Short sale affidavits seek assurances beyond the expected scope of title agents’ knowledge.
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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.