Bulletin: NL000023

Dear Associates:

If you are insuring a purchaser at a foreclosure sale, you must do the following:

1. Verify that all foreclosure requirements (including a final, non-appealable judgment in a judicial foreclosure) under state law have been met.
   
   
2. Verify that the mortgagor is not in possession of the property. If the mortgagor is in possession when you issue your commitment, the commitment should contain the following exception:
   
   "Any rights, claims or interest of (the mortgagor) in the land or any claim that the foreclosure by (lender) is invalid."
   
   
3. Except to any applicable right of redemption (e.g., State law; IRS; Agricultural Credit Act of 1987).
   
   
4. In all states except New Mexico and Texas, you must add the following creditors' rights exception unless our guidelines on fraudulent transfers are met or unless you issue the 1990 or 1992 ALTA Policy:
   
   "Any claim, which arises out of the transaction creating the estate or interest of the insured, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws."
   
   
5. If you are asked to delete the creditors' rights exception or exclusion (where allowed), please call our underwriting personnel.

If you are asked to insure the grantee of a deed in lieu of foreclosure, please consult our Underwriting Manual or underwriting personnel.