Bulletin: SLS2014010

Dear Associates:

We take this opportunity to remind you of the necessity of avoiding insuring properties where the mortgagor subject to the foreclosure or any related parties remain in possession of the property.

In those rare instances where policies are issued, the following exception must be taken in issuing any Commitments or Policies for such parties in possession when the mortgagor subject to the foreclosure remains in possession of the property when insuring title out of a foreclosure sale:

"Any rights, claims, or interest of (the mortgagor) in the land or any claim that the foreclosure by (lender) is invalid."

You may rely on any credible evidence such as a lender or broker confirmation or an Affidavit from the Seller or Buyer as to whether or not the foreclosed mortgagor(s) or any related parties remain in possession of the Premises. Any transaction to be insured where the Premises remain in the possession of the foreclosed mortgagor(s) or any related parties must be authorized by the Legal Underwriting Department.

It is particularly important to note that because the parties in possession exception is specifically excluded from Schedule B of the Enhanced/Homeowner’s Policy, if you are issuing an Enhanced/Homeowner’s Policy and you know that the foreclosed mortgagor(s) or any related parties remain in the premises, the following exception MUST be inserted into Schedule B of the Policy before issuing the same.

"Any rights, claims, or interest of (the mortgagor) in the land or any claim that the foreclosure by (lender) is invalid."

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

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