Bulletin: NL000040

Dear Associates:

Your agency may be liable for verbal representations and closing instructions that fall outside the scope of title insurance. The underwriter does not protect the issuing agency or the insured on these problems.

Closing Instructions:

Closing instructions may ask that you represent a lender has a first lien; or "you made a thorough examination of title, and the commitment (binder or policy) truly reflects the title".

We suggest that you:

• decline to sign the closing instructions; or
  
  
• send amended closing instructions to the lender prior to closing that delete these provisions and state that the rights of the parties will be defined by the policy to be issued; or
  
  
• agree (if true) that the lien will be insured as a first lien subject to the terms of the policy.

You must make the final decision on how to respond. However, your underwriting contract does not cover these matters.

Title Representations

After you issue a commitment, the customer may be asked whether a matter or exception is "satisfied" or whether it "doesn't apply." When you answer, do not say:

"You're safe"
"It's okay"
"It's clear"
"It doesn't apply"
"No problem"

By these answers, you may be subject to non-policy liability.

Instead, we suggest that you say: "we will be willing to issue our policy without exception" or "we will insure against loss under the policy terms (by reason of the matter)".