Bulletin: NE2009001

Dear Associates:

This Bulletin is meant to serve as a reminder regarding execution of Notary acknowledgements.

In Nebraska, as in virtually all states, a Notary commission is valid only within the state in which the commission is issued. An acknowledgement completed by a Nebraska Notary in another state may not be a valid acknowledgement, and recording of the document may not be considered proper perfection and therefore will not constitute notice of the interest created by the document.

Trustees in bankruptcy have in some instances successfully challenged the validity of liens secured by mortgages or deeds of trust improperly perfected because acknowledged in a jurisdiction other than that in which the Notary holds the Notary commission. These liens have been voided, resulting in total loss to the lenders involved. Title insurance claims by these lenders based on such outcomes can result in a loss up to the full amount of liability under the policy, in addition to any funds expended in defending such claims on behalf of our Insured.

A Notary's commission is secured by a surety bond. Anyone injured by a Notary's negligent or wrongful act can proceed against the Notary's bond for reimbursement of all or part of a loss. The bond issuer, or surety, can then proceed against the Notary in the Notary's personal capacity to recover sums paid on the bond.

This is a serious warning to Nebraska agents who issue policies or close transactions involving neighboring states. Documents executed in Nebraska must be acknowledged by a Nebraska Notary holding a valid commission; documents executed elsewhere must be acknowledged by a Notary duly qualified in the particular jurisdiction.

If you have questions relating to this bulletin, please contact Nebraska Underwriting Personnel or Stewart Legal Services.

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