Bulletin: TX2020005

Date:
March 31, 2020
To:
All Texas Issuing Offices
RE:
UNDERWRITING - Use of RON in Home Equity Transactions

Dear Associates:

Tex. Const. art. XVI, § 50(a)(6)(N) provides that Home Equity loans must be closed only at the office of the lender, an attorney at law, or a title company. The Texas Supreme Court in Fin. Comm'n of Tex. v. Norwood, 418 S.W.3d 566 (Tex. 2014) held that the execution of documents necessary for a home equity loan is part of closing the transaction and must be done at the office of the lender, an attorney at law, or a title company.

Since you cannot verify the location of a person executing a document using remote online notarization, it cannot be used in home equity transactions in Texas.

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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.