Bulletin: CA2019005

Date:
June 26, 2019
To:
All California Issuing Offices
RE:
RATES AND/OR FORMS UPDATE - REMINDER: Issuance Guidelines for Usury Endorsements ALTA 27 / CLTA 132-06 and CLTA 132 NOT AVAILABLE FOR NON-INSTITUTIONAL/HARD MONEY LOAN POLICIES

Dear Associates:

This Stewart Title Guaranty Company (STGC) Bulletin is intended to provide a reminder of guidelines and requirements for the issuance of usury endorsements to loan policies, i.e., the ALTA 27 / CLTA 132-06 and/or the CLTA 132.

STGC’s Virtual Underwriter (www.vuwriter.com) has guidelines for the issuance of Usury endorsements generally as well as the ALTA 27 Usury endorsement. Issuance of any usury endorsement always requires prior underwriting approval as coverage against usury violations is an extrahazardous risk. Please submit for approval with the completed request form and necessary document through the ordinary process at policyapprovalrequest@stewart.com.

Further, the issuance of the ALTA 27 / CLTA 132-06 or the CLTA 132 requires underwriting approval and is only available for institutional lender loan policies and very well-documented broker-arranged loans reviewed by an Associate or Senior Underwriter; usury endorsements will not be approved by underwriting in connection with other non-institutional / hard money loan transactions. 

Lastly, STGC Bulletin SLS2014002 - Underwriting Extrahazardous Risks provides a fairly comprehensive list of matters considered extrahazardous risks requiring prior STGC underwriting approval. This list is not exhaustive, e.g., SWAP endorsements, so the “rule of thumb” is that any endorsement that is atypical or out-of-the-ordinary should be submitted for STGC underwriting approval. 

If you have any questions about this bulletin, any pricing concerns, or any other bulletin please contact a member of your Stewart Title Guaranty Company’s California Underwriting Team. 

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:
SLS2014002 UNDERWRITING - Extrahazardous Risks
Underwriting Manual:
5.36 Extrahazardous Risks
 
20.24 Usury Coverage
Exceptions Manual:
None
Forms:
ALTA Endorsement 27-06 (Usury) (10/16/08)