Bulletin: NY000358

This bulletin supplements Bulletin 355. It contains an exception to be included in all reports where it is known, or there is a good likelihood there is a distressed/ short payoff.

Approval of Stewart Agency Legal Services is required before closing a transaction with a short/distressed sale.

This exception must be included in all transactions where you know, or believe short sale will occur:

If transaction is a distressed (short) sale, the following requirements must be satisfied:

1. A payoff letter is required from the current lender stating the amount the lender is willing to accept and the conditions of the transaction.
   
   
2. Lender's payoff must be followed exactly. There can be no variation from the conditions.
   
   
3. A HUD-1 must be signed by buyer and seller and a copy must be kept in title file. The lender will likely require to see the HUD before the sale can be completed.
   
   
4. If seller is to receive no proceeds, obtain copies of all checks, an affidavit from settlement agent, or buyer if there is no settlement agent, stating seller has received none of the proceeds.
   
   
5. All junior liens and mortgages are to be satisfied. If there are no instructions from the lien holder on pay off, the lien must be excepted.
   
   
6. If foreclosure has started a letter must come from attorney stating that upon receipt of amount stated in lender's letter, attorney will discontinue action and cancel lis pendens.

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