Bulletin: WI2016003

Date:
October 17, 2016
To:
All Wisconsin Issuing Offices
RE:
UNDERWRITING - Title Search Guidelines for Expedited Residential Loan Policies

Dear Associates:

This bulletin is being issued to clarify the requirements for a title search when issuing a Residential Loan Policy under the “Expedited Search” rate in Wisconsin, and is only applicable for that purpose. 

Definitions

For this Bulletin, the following terms are defined as follows:

  • “Deed” – means a Warranty Deed resulting from a bonafide arms-length sale transaction. It does not include: Deeds given in Lieu of Foreclosure; Lender conveyances to a GSE’s (Freddie Mac, Fannie Mae, etc.); or any acquisition or REO sale by a lender less than 10 years old.  
     
  • “Institutional lender” – means a lending entity whose loans are regulated by federal or state law.  

General Exceptions Required

If a Residential Loan Policy is issued under the Expedited Search rate, whether you perform a short search or rely upon a starter, you must include general exceptions for covenants, restrictions, easements, and minerals, as provided by the Underwriter.   

Searches

Residential Purchase Transaction     

Search two (2) Deeds back. 

Residential Refinance of an Institutional lender loan  

Search one (1) Deed back provided the current owner has been in title for at least 24 months. If ownership has been less than 24 months, search two (2) Deeds back.

Use of a Starter Policy for Expedited Search Residential Loan Policies  

You may use a prior Owner's or Loan Policy with specific Schedule B title exceptions to begin your search, even if the prior policy was issued by another title insurer or one that has been merged into another title insurer.  

You may use a prior Loan Policy issued with general exceptions for covenants, restrictions, easements and minerals, or an ALTA Short Form Residential Loan Policy, provided you are issuing another Loan Policy or Short Form Policy with those same or similar exceptions, even if the prior policy was issued by another title insurer or one that has been merged into another title insurer. 

If there is a significant gap between the current date and the date of the available title records for the applicable county, you should also search that approximate gap time behind the date of the starter.

You must keep a copy of any prior starter policy used in your file.  

As always, the use of a starter policy is subject to the following:

IF YOU BELIEVE THAT THE PRIOR TITLE EVIDENCE OR SOURCE OF THE INFORMATION MAY BE UNRELIABLE (SUCH AS A FAILED TITLE COMPANY), UNTRUSTWORTHY, OR INCOMPLETE IN ANY WAY, YOU MAY NOT USE THAT PRIOR POLICY TO START YOUR SEARCH.    

Residential Construction Loans  

Given the types of coverage and endorsements commonly requested by lenders for new construction transactions, the expedited search guidelines are not adequate. Any policy issued to cover a Residential Construction Loan should have a full search, contain specific Schedule B exceptions, and the applicable full search rate should be quoted. If a lender requests a policy to insure a Residential Construction Loan with the standard expedited search exceptions and at the applicable expedited rate, please contact your Underwriter.   

Taxes and Assessments

In all cases, you must search taxes, assessments of all types, and other governmental charges. They must be excepted by separate exception in Schedule B or satisfied, except for those items not yet due and payable. 

Other Liens and Name Search

In all cases, you must search the applicable indexes to the statute of limitations for enforcement for all judgments, Federal judgments, Federal and State tax liens, child support liens, construction liens, and other docketed liens. You must always search the name(s) of anyone who had an interest in the property during the applicable time period. Finally, before closing a transaction, all issuing offices must search the names of the parties to the transaction, including the seller, buyer/borrower, payoff lender and new lender, against the Specially Designated Nationals List (SDN), Foreign Sanctions Evaders List (FSE) and Stewart Special Alerts List. You can simultaneously search the SDN List and the FSE List, as well as Stewart Special Alerts by clicking here.

If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.

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:
WI2016002 RATES AND/OR FORMS UPDATE - Wisconsin Rate Manual Revised Schedule of Charges
Underwriting Manual:
None
Exceptions Manual:
None
Forms:
None