Bulletin: CA000003

Dear Associates:

As we have previously discussed, the RTC takes the position that:

• They are required to provide consent before any of their inferior liens are wiped out after a foreclosure sale. The inferior liens may either be a trust deed or judgment; and
  
  
• Even after they have provided their consent, they have rights of redemption for a period of 1 year from the date of the foreclosure sale.

As a result, prior to insuring free and clear of the inferior lien subsequent to a foreclosure sale the Company policy will be to require:

• A recorded release of the lien together with any rights of redemption; or
  
  
• Placing an exception to the lien together with any rights in the property including but not limited to rights of redemption in the policy of title insurance.

I have attached a write-up for the failure to consent along with a write-up for the rights of redemption which should be used by your title officers and examiners in the appropriate instance.

More often than not, an inferior lien held by a failed institution, setting forth that it is currently controlled by the RTC or FDIC, will not be set out on the record. Therefore, before eliminating any inferior lien following a foreclosure sale, please call your local Stewart Title Guaranty underwriter for more information.