Bulletin: CA000031

Dear Associates:

Although we commonly report the existence of recorded declarations of homestead, they do not create a lien against title to real property. The declaration of homestead creates certain protections for the declarants against the enforcement of involuntary liens. Assuming that the deed of trust is executed by all of the then current vestees, a declaration of homestead has no effect upon the validity or enforceability of the deed of trust because the deed of trust creates a voluntary lien.

Nevertheless, lenders frequently require the abandonment of a declared homestead, perhaps because the lender does not understand the nature of these protections in California. (A declaration of homestead may mean other things in other jurisdictions.) When dealing with the reporting of the existence of a declaration of homestead, consider the following:

1. The declaration of homestead should be reflected in the preliminary report.

2. If the lender requires that the declaration of homestead be eliminated from the policy, you may offer to show the declaration in Schedule B, Part II.

3. If the lender still requires the elimination of the declaration of homestead from the Policy, you may be able to obtain permission from Underwriting Personnel to remove mention of the declaration without an actual abandonment of the homestead being recorded. We will require that an office note be carried in the office copy of the policy to the effect that the declaration must be shown in all preliminary reports, and that all documents conveying or encumbering the property shall be signed by both husband and wife (in the instances in which a married person is the Declarant).

Questions or comments should be directed to your Stewart Title underwriter.