Bulletin: FL000006

Dear Associates:

We have had claims from time to time concerning judgments, mortgages or other items falling within the gap. Such exposure is commonplace and is a normal aspect of doing business in the title insurance industry.

It is our duty to maintain the smallest gap possible due to the inherent danger. Recently one Stewart office discovered a judgment in the gap for an amount approaching $200,000. This continuation search was completed on the morning of the proposed closing and allowed us to abort the closing and avoid a clear claim in that amount.

By definition, what I am speaking of at this point in time is the gap from the date of completion of the search and commitment to the date of closing. I am not in this bulletin addressing the gap from foreclosing to recording which, of course, should also be kept to a minimum.

It is imperative that both the pre-closing gap and the post-closing gap be as short as possible. As you know, there is resulting liability to be shared by both the agent and the underwriter on gap claims. The shorter the gap, the less the likelihood of a claim.