Bulletin: VA2020005

Date:
October 23, 2020
To:
All Virginia Issuing Offices
RE:
UNDERWRITING - Foreclosures in Virginia

Dear Associates:

Per Stewart Title Guaranty Company Bulletin SLS2020008, issued on April 20, 2020, and revised on September 4, 2020, and September 14, 2020, we are advising all Virginia agents that the federal moratorium on foreclosures on federally backed loans has been extended to December 31, 2020.

Link: https://www.vuwriter.com/en/bulletins/2020-3/sls2020008.html

What does the federal moratorium mean to a Virginia title agent?

STGC policy: Do not insure based on foreclosures begun or completed after March 1, 2020, until you are notified otherwise, or unless you obtain STGC underwriter approval. Do not waive or assume a lien or a procedural requirement has expired if it had not expired prior to March 1, 2020, unless notified otherwise or you obtain STGC underwriter approval.

Possible exception for insuring:

The US Department of Housing and Urban Development (“HUD”) issued a Mortgagee Letter dated August 27, 2020, extending the foreclosure and eviction moratorium for FHA-insured Single-Family mortgages until December 31, 2020, per the CARES Act. HUD noted there is an exception for vacant or abandoned properties. FHA said the following are acceptable evidence of abandoned or vacant property at the time of foreclosure.

  • Recorded notice from the municipality that the property is vacant or abandoned.
  • Copy of foreclosure inspection report.
  • In a judicial foreclosure (rare in Virginia) a finding of abandonment or vacancy by the court.
  • In a separate court case, e.g., an appointed receiver for distressed property, a court finding that a property is vacant or abandoned.
  • A written statement from loan servicer or foreclosing trustee that the property is vacant or abandoned.

STGC in Virginia will review the above evidence to determine insurability of a property. Continue to carefully review foreclosure property presented to you and check local circuit courts for filed homestead deeds and federal bankruptcy court for filed bankruptcy petitions (“PACER”), because a filed bankruptcy prevents a Virginia foreclosure.

Note: The Virginia General Assembly enacted Code of Virginia Section 44-209 [see link below] on April 22, 2020, which provides additional protections to furloughed federal government employees and employees of federal contractors, as specified therein, affected by closure of the federal government for a period of 14 consecutive days or longer as a result of a lapse of appropriations.

Please be aware of this Virginia Code section in the event of a federal shutdown. https://law.lis.virginia.gov/vacode/44-209/

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.