Bulletin: NY000715

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Bulletin: NY000715

Bulletin Document
Date: October 30, 2024
To: All New York State Agents, Office Counsel, and Managers
RE: UNDERWRITING - Attorney Opinion Letter (AOL) and Settlement Agent Agreement Services

*This is a reissue of National Bulletin SLS2024013*

Dear Associates:

An Attorney Opinion Letter (AOL) is being used in lieu of title insurance in some residential loan transactions. Fannie Mae and Freddie Mac have approved its use as a substitute for a lender’s title insurance policy under certain conditions if the opinion indemnifies the lender and its successors in interest. Because of the requirements and structure of the AOL, it may violate monoline (single type of insurance) and other insurance laws.

A transaction involving an AOL may include a Settlement Agent Agreement and a Closing Indemnification Letter (for the settlement and disbursement of funds). These documents may subject a participant to additional legal exposure.

Stewart Title Insurance Company (STIC) does not participate in the AOL program.

No documents, including but not limited to closing instructions and commitments, produced in connection with an AOL transaction may refer to Stewart Title Insurance Company or “Stewart Title” more generally.

Because a STIC title insurance policy is not requested in the AOL program, you may not issue an NY Agent Authorization Letter.

A STIC owner’s policy shall not be issued in connection with a transaction involving an AOL.

If you contemplate participating in an AOL program, you should seek independent legal advice as to whether the AOL constitutes the practice of law, or if the agreements violate New York state insurance, licensing and other laws.

If you have any questions regarding the above, please get in touch with the Stewart Title Legal Department at 212-922-0050 and speak with any Underwriting Counsel.

Looking for who to call, click on our Quick Reference Guide.  

THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER  AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.


References

Bulletins Replaced:
  • None
Related Bulletins:
Underwriting Manual:
  • None
Exceptions Manual:
  • None
Forms:
  • None