Bulletin: TX2012003

Dear Associates:

The Texas Commissioner of Insurance has considered the question of the authority of title insurance agents and direct operations to sign so-called Short Sale Affidavits that require agents and direct operations to make representations and indemnities concerning the knowledge of parties to transactions, especially those transactions where the lender is not receiving full loan payoff.  Freddie Mac agreed with the American Land Title Association to modify the form to remove title companies from making such representations and indemnities; however some lenders have not changed their letters or other forms.

Should you be requested to execute a short sale affidavit that contains representations or indemnities, you should seek counsel and consider providing the lender with a copy of this bulletin which provides the operative language from the Commissioner’s Order.

Commissioner’s Order 12-0217 dated March 19, 2012 states: Requiring title agents to execute short sale affidavits violates P-35 as written. Short sale affidavits seek assurances beyond the expected scope of title agents’ knowledge.

If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.

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