Bulletin: NL000090

From time to time we receive complaints from lenders that they have not received their loan policies in a timely manner. In some cases, the loan polices have been issued and sent to the lenders, but the lenders are unable to verify their receipt. Therefore, to assist lenders in matching up their loan policies with their loan files, and thereby confirm that they have received their loan policies, we are instituting a recommended procedure for adding the lender's loan number to the loan policy, to the extent that such information is reasonably ascertainable.

Some institutional lenders already require their loan numbers to appear on their loan policies. Some of our policy forms (for example, the ALTA Short Form Residential Loan Policy, the ALTA Master Residential Loan Certificate, and the STG Home Equity Policy) already contemplate insertion of the lender's loan number. This procedure will be helpful to all of our lending customers, but it will be particularly beneficial to those lenders with a large number of transactions. This information will both increase our customers'satisfaction and avoid the necessity of issuing duplicate policies.

The Loan Number

In general, the loan number should be the same as the one provided in Item 7 ("Loan Number") of the HUD-1 Settlement Statement. However, since this procedure is intended to assist lenders in identifying their policies, it may be appropriate to inquire about the lender's preferences in this matter. Please use whatever number they advise.

Instructions for the Loan Policy

Please add the following informational note to the loan policy:

"NOTE: FOR INFORMATION ONLY: Lender's File/Loan/Reference Number is _________."

To assist lenders in locating their loan numbers on the policies, we suggest that you uniformly insert this note below the last item on the Loan Policy (in Schedule B, or in your schedule of subordinate matters, if applicable), preferably several lines below the last item, and preferably without a reference number (to distinguish this information from a title-related matter).

The loan policy doesn't insure the lender's reference number. Therefore, please don't include the informational note in any portion of the legal description.

Instructions for the Loan Commitment

Lenders sometimes use different reference numbers for the application and the actual loan. If you can confirm that the lender uses the same reference number for its applications and its loans, the loan number will probably be available at the time the order is placed. In that case, please fill in the blank on the commitment. If the loan number is not known when the order is placed (i.e., only the lender's application number has been assigned, and it will be different from the final loan number), please leave the line blank on the commitment, or insert "TBD" as a reminder to fill in the loan number at the time of closing.

Implementation

This is an additional service offered to our customers, to the extent they want it and provide the necessary information. If a lender doesn't assign a loan number to a transaction, or a lender doesn't want the informational note on its policy (whether or not a loan number is assigned), or, after reasonable inquiry, you are unable to ascertain a loan number, you may delete the clause entirely, or insert "N/A" on the line.

AIM users:

The Region Automation Coordinator or Account Manager in your Regional Office will implement this change to the AIM system.

Non-AIM users:

If your policy production method is incompatible with this practice (for example, because of software constraints), you may reference the loan number in any manner that conveys the information without insuring its accuracy (for example, by noting it in the caption of a transmittal letter to the lender).

Please contact the National Legal Department if you have questions about the above procedures or acceptable alternative methods of implementation.