Bulletin: TX000017

Dear Associates:

It is our policy to insure a lien refinancing a prior valid lien on the homestead in an amount that includes:

• the unpaid principal balance and accrued interest on the existing valid lien;
  
  
• all points charged for the purpose of refinancing the loan, including all discount points, all origination fees, and the VA funding fee;
  
  
• prepaid or preliminary interest to the end of the month of closing;
  
  
• mortgage insurance premium (whether PMI or HUD) rolled into the new loan; and
  
  
• other closing costs (including prepaids) up to the greater of (a) 5% of the new principal loan amount or (b) $5,000.

The borrowers cannot receive any net proceeds from the closing except reimbursement for advance deposits with the new lender not exceeding $5,000.00.

We also will insure these additional amounts on a purchase money mortgage.

The new Deed of Trust should recite that it renews or refinances the prior valid lien and should contain the following (or similar) "bad debt" language:

"If any portion of the note cannot be lawfully secured by this deed of trust, payments shall be applied first to discharge that portion."

The standard State Bar of Texas, V.A., F.H.A. and FNMA/FHLMC Deed of Trust contain acceptable "bad debt" language.

It is Stewart's intent for you to remain competitive on insuring refinances. If these conditions cannot be met, please call the National Office.