This amends our memo of September 19, 2007.On August 1, 2007 the following changes were approved by Governor Spitzer enacting a new Section 1320 of The Real Property Actions and Proceedings Law (RPAPL) and amending Section 3215(g)(3) of the Civil Practice Law and Rules (CPLR). Section 1320 RPAPL: any foreclosure action commenced on or after August 1, 2007 that affects a 1-3 family residence or up to three individual residential condominiums must contain the following language in the Summons in bold face as follows: NOTICE YOU ARE IN DANGER OF LOSING YOUR HOME If you do not respond to this summons and complaint by serving a copy of the answer on the attorney for the mortgage company who filed this foreclosure proceeding against you and filing the answer with the court, a default judgment may be entered and you can lose your home. Speak to an attorney or go to the court where your case is pending for further information on how to answer the summons and protect your property. Sending a payment to your mortgage company will not stop this foreclosure action. YOU MUST RESPOND BY SERVING A COPY OF THE ANSWER ON THE ATTORNEY FOR THE PLAINTIFF (MORTGAGE COMPANY) AND FILING THE ANSWER WITH THE COURT.No title may be insured through a mortgage foreclosure commenced on or after August 1,2007 foreclosing a mortgage on "residential property containing not more than three units" unless the Summons contains the notice set forth above. CPLR Section 3215 (g)(3)The Section applies to default judgments, based upon a natural person's non-appearance in actions for non-payment of contractual obligations. An amendment now extends this section to natural persons who are defendants in residential mortgage foreclosure actions. When you are requested to insure out of a mortgage foreclosure commenced on or after August 1, 2007 on a one to three family residence, you may not insure if the judgment of foreclosure includes a judgment against a natural person that was based upon a default by that defendant, unless the provisions of the statute are strictly complied with. The statute requires that an affidavit shall be submitted that additional notice has been given to the natural defendant, by or on behalf of the plaintiff, at least twenty days before the entry of such judgment, by mailing a copy of the summons by first-class mail to the defendant at his place of residence in an envelope bearing the legend "personal and confidential" and not indicating on the outside of the envelope that the communication is from an attorney or concerns an alleged debt. In the event such mailing is returned as undeliverable by the post office before the entry of a default judgment, or if the place of residence of the defendant is unknown, a copy of the summons shall then be mailed in the same manner to the defendant at the defendant's place of employment if known; if neither the place of residence nor the place of employment of the defendant is known, then the mailing shall be to the defendant at his last known residence. The additional notice may be mailed simultaneously with or after service of the summons on the defendant. An affidavit of mailing pursuant to this paragraph shall be executed by the person mailing the notice and shall be filed with the judgment.If the provisions of this statute have been strictly complied with, the failure of the defendant to receive the additional notice shall not preclude the entry of default judgment.Your examiners should be required on initial examination, or on continuation prior to closing, to turn out all filed documentary evidence of compliance with this statute for your reader's review.

Recently, we have seen more claims arising out of no consideration transfers in what appears to be a "flip" situation with a straw buyer.

Example: A Grantor in financial distress conveys title for no consideration to a Grantee who then within one year transfers the property to a bona fide purchaser for value. Subsequently, the original Grantor attacks the conveyance on the basis of fraud and misrepresentation. The original Grantor believed its Grantee was assisting him in getting out of foreclosure and that he can remain in his house.

In any situation where there is a no consideration (non familial) deed within one year of a subsequent transfer or mortgage that we are being asked to insure, we require the following:

• The original grantor must be run for judgments, liens and bankruptcy searches.
  
  
• The original grantor must join in the conveyance to the bona fide purchaser for value.
  
  
• Copies of two forms of identification will be required for all parties.

Please note that this is a separate and distinct requirement from the Home Equity Theft Protection Exceptions that were set forth in a previous memo.

Please use caution and due diligence in such situations and contact company counsel with any questions or concerns.

This memo supersedes our memos of July 17, 2003 and December 14, 2005. Claim activity dictates the need for tightening our examination requirements.

1. Purchases and Mortgages on other than 1-4 family residence

When you are requested to issue a policy in connection with a purchase or in connection with a mortgage on property other then a 1-4 family residence we will require that a full search be done. A full search means that the chain of title is examined back to a deed recorded more then forty years ago which appears on its face to be a non-family bonafide conveyance for a valuable consideration.

2. Mortgage Refinances

When you are requested to issue a policy in connection with a mortgage refinance and the underlying property is an improved 1-4 family residence the following requirements apply:

    a. You may assume title good in the grantee of the last insured deed if that grantee:
         1. Purchased for a valuable consideration;
         2. The deed to that grantee has been on record for at least two years; and
         3. That when that grantee took title there was an institutional purchase money mortgage. In such              a situation the prior chain need not be examined, prior owners need not be run however prior              open mortgages must be turned out.

     b. Regardless of the above, if the policy to be issued exceeds $2,500,000 a full search as           described above must be run and high liability approval must be obtained.

3. Restrictive Covenants, etc.

     a. When doing an owner's policy, or an owner's policy with a simultaneous lender's policy, all           covenants, restrictions, easements and agreements must be set forth in the report and requests           for affirmative insurance will be considered on a case by case basis.

     b. When insuring a mortgage refinance, instead of searching for such instruments recorded prior to           the last insured deed, the policy may set forth the following exception:

          "Covenants, restrictions, easements, agreements and similar instruments of record, if any, but           policy insures that notwithstanding said instruments the existing improvements on the premises           may remain undisturbed, that the use of the premises for residential purposes will not be           impaired and provision for the forfeiture or reversion of title, if any will not be enforced".

     c. Any request to affirmatively insure against the enforcement of any restrictive covenant involving           proposed new construction, against the enforcement of a type of use, or to insure that existing           violations may continue undisturbed must be referred to this office for consideration and           approval.

Please be advised we have recently received numerous questions concerning the new title policies adopted 6/17/06 and effective 5/1/07 with respect to the survey coverage provided therein.

The new Loan Policy contains survey coverage within the body of the policy jacket under Paragraph 2C.

Since the survey coverage is automatic per paragraph 2C of the loan policy, no exception as to "any state of facts an accurate survey may show" needs to be mentioned in the title report or policy.

Please be sure to continue to have the survey affidavit signed by the owners at closing when a loan is being insured and a survey has not been read into the report and policy.

As for a fee policy, a survey is always required in order to omit the "any state of facts" exception. The new fee policy does not contain any survey coverage absent an insurable survey.

Please contact company counsel should you have any questions.

Date: May 16, 2007
Re: Disposition of Open Mortgages

It has recently come to our attention that occasionally open mortgages are being omitted without sufficient proof of payment. The following are acceptable procedures for clearing open mortgages:

• You may obtain a Letter of Indemnity from the prior insurer of the current fee owner or a copy of the policy insuring the current fee owner issued by a participant in the Mutual Indemnification Agreement.

• Under the Mutual Indemnification Agreement, obtain a copy of loan policy omitting the subject mortgage along with corroborating proofs of payment (ie: payoff letter, copy of payoff check, proofs of mailing)

• Ancient mortgages may be omitted if they meet the criteria set forth in NYSLTA Recommended Practices M-7. (See our website)

• If a mortgage is not in foreclosure you may take an escrow deposit of no less than double the face amount of the mortgage.

• A satisfaction of mortgage presented at the closing along with the original note and mortgage.
  Under no circumstances may a mortgage be omitted based solely upon information contained in a credit report.

Should you have any concerns or questions, please contact company counsel.

Date: 4/4/2007
Re: TIRSA Rate Manual Section 14 Refinance and Subordinate Mortgages Revisited

Amended Section 14 of the TIRSA Rate Manual dealing with refinance and subordinate mortgage loans has been in effect since February 15, 2006 yet we still get questions as to its applicability to specific situations.

• Section 14 does not apply to construction loans. They are covered by Sections 12, 13 and 16 of the Rate Manual.

• The first major change is a change in the breakpoint between the 50% rate and the 70% rate. It is now $475,000.00.
  
  If the mortgage being insured is $475,000.00 or less then the rate for the amount of  insurance  up  to  the  eligible discount amount is 50% of the applicable full loan rate and the rate for the amount of insurance above the eligible discount amount is 100% of the full applicable loan rate.
  
  If the mortgage being insured is greater then $475,000.00 then the rate for the amount of insurance up to the eligible discount amount is 70% of the applicable full loan rate and the rate for the amount of insurance above the eligible discount amount is 100% of the full applicable loan rate.

• Eligibility for a discounted rate is no longer dependant on whether there is prior fee title insurance or mortgage title insurance.
  
  The criteria determining the amount of the proposed mortgage insurance to be given a discounted rate is now based on matters that are fully discoverable in the public records.  These  include  the  consideration  paid by  the current mortgagor for the premises and the face amount of mortgages made by the current mortgagor. You are to use the greater of the amount of the consideration  paid for the mortgagor's interest in the premises or the aggregate face amount of all mortgages made by the proposed mortgagor affecting the premises to be mortgaged. Only consider transfers made to or mortgages made by the current mortgagor within the ten years immediately proceeding the date of application for the loan policy. However, older mortgages are to be considered if they are the subject of a consolidation agreement made within the past ten years.

• Section 14 requires that there has been no change of ownership. No discount will be given unless there is a transfer between husband and wife whereby one of the parties is removed from the deed. If one or more persons are added to title that constitutes a change of ownership and there is no eligibility for a discounted rate.

• Section 14 provides that the consideration paid by the proposed mortgagor for the premises is to be computed based on the amount of transfer tax paid, or the consideration shown on the deed to the mortgagor, or otherwise shown in the public records. (the amount of consideration is shown on the RP-5217 which is available on ACRIS) Keep in mind that it is the intent of Section 14 of the TIRSA Rate Manual to give the largest discount possible.

• If a mortgage has been paid off but the satisfaction of mortgage has not yet been recorded that mortgage is not an existing mortgage and is not to be considered.

• A mortgage made more then ten years ago but consolidated with other mortgages is to be considered as being made within the past ten years if the consolidation agreement has been recorded within the past ten years. If mortgages have been consolidated within the past ten years you are to use the consolidated amount of those mortgages instead of the face amounts of the individual mortgages.

• Mortgages that were made by someone other then the current owner but which have been consolidated by an agreement made by the current owner within the past ten years will be considered mortgages made by the current owner.

• Section 14 requires that the new mortgage describe the same property as in the instruments being considered for establishing eligibility. If the new mortgage covers all or some of the property in the instruments upon which eligibility is being considered we will allow eligibility however if the new mortgage contains any additional property then no discount will be permitted.

• Every mortgage to be insured other then a purchase money mortgage or a construction loan is to be considered as potentially eligible for a discounted premium. 

Refer your questions to this office; we will do our best to answer them.

Date: 4/3/2007
Re: TIRSA Rate Manual, Fourth Reprint Rates & Endorsements -
         THIS MEMO IS EFFECTIVE MAY 1, 2007

In connection with the filing of the 2006 ALTA policies TIRSA has filed the Fourth Reprint of the Rate Manual with the Insurance Department.

The basic rates remain the same, however we specifically call your attention to our Rate Deviation filing of June 18, 2006.

Both the Rate Manual and our Deviation Filing appear on our website at www.washtitle.com. The Title Rate Premium Calculator on the website has been modified to reflect the deviation, i.e., the 15% reduction of fee title premiums on Owner's policies of less then $1,000,000.00.

The Rate Manual contains all the Rates and Rules. It also contains sample forms of the 1992 policies, the 2006 policies and sample endorsements for use with each category of policies.

Endorsements for use with the 1992 policies that you must issue in connection with titles that close prior to May 1, 2007 may be obtained in the usual way. Endorsements for use with the 2006 policies will soon be available for downloading from our website. That will be the only source.

Once again we specifically call your attention to Section 14 dealing with the discounted rate for Refinance and Subordinate Mortgages. Strict compliance with this section is mandatory. A separate memo on this subject will be forthcoming.

Date: 3/27/2007
Re: ALTA 2006 Policies - THIS MEMO IS EFFECTIVE MAY 1, 2007

The New York State Insurance Department has approved, effective May 1, 2007, TIRSA's filing of the 2006 ALTA Owner's Policy and the 2006 ALTA Loan Policy with revised standard New York endorsements and the ALTA 2006 Short From Residential Loan Policy with TIRSA amendments. These will replace the 1992 policies that are presently being issued. The 1992 policies may not be issued for closings which take place on or after May 1, 2007.

Packages of numbered hard copies of both the owner's and loan policies will be delivered to you in time for use with your closings which take place May 1st or thereafter.

Endorsements for the 1992 policies may be obtained and used in the same manner as you have been currently doing. The present endorsements may only be used for 1992 policies. All endorsements for the 2006 policies are new although the coverage of most of them is the same as the previous endorsements. The new endorsements will be downloadable from our website www.washtitle.com.

A detailed comparison of the differences in coverage between the 2006 policies and the 1992 policies may also be found on our website. Follow the prompts.

The issues that will probably come up most often are:

1. The Loan Policy as modified by the standard loan policy endorsement provides for survey coverage for 1-4 family dwellings and vacant land. There is no charge for this coverage. No survey endorsement is needed.

2. The Limited Liability Company and Limited Liability Partnership endorsement is no longer required - - the coverage is within the definition of "insured" in the policy. There is no additional charge for this coverage.

3. The Last Dollar endorsement is no longer necessary. The provision of the 1992 ALTA Loan Policy that resulted in its need does not appear in the 2006 ALTA Loan Policy. There is no additional charge for this coverage.

4. The covered risk regardg cedritor's rights is expanded to cover transactions occurring prior to the transaction creating the interest being insured. (covered risk 13(a) of the Loan Policy and 9(a) of the Owner's Policy).

5. A pending disbursements clause similar to the language set forth in Part 1 Section 1(n)(a) of the revised TIRSA Rate Manual must be set forth in Schedule B in every policy insuring a construction loan.

Please contact us with any questions you may have.

Date: 2/28/07
Re: Escrow Service Charges and Escrow Procedures Generally

     1) Washington Title's form of Escrow Agreement provides for the collection of an initial escrow service charge and annual service charge equal to the initial service charge. This applies to both escrows to pay and escrows to hold.

You are authorized to make an initial and annual service charge of $75.00.

Any larger charge will be considered excessive.

     2) Please provide your closers with an adequate supply of our form of escrow agreement. (A supply is available from this office).

     3) Instruct your closers to be sure to provide the depositor with a copy of BOTH SIDES of the signed escrow agreement. It is a common error for closers to photocopy the front and ignore the back which contains all the terms and conditions.

Date: 1/24/07
Re: Home Equity Theft Prevention Act ( Please Click Here )

Date: 11/29/06
Re: High Liability - Revisited

This memo supersedes our prior memos on this subject and modifies the provisions of Paragraph 6.C (1) of our Underwriting Agreement.

Effective immediately approval of the issuance of title insurance policies having a "high liability" must be obtained in the following cases:

1) Approval is required if the amount of owner's or lender's policy exceeds $2,500,000.00

2) Any policy, regardless of amount of insurance, insuring land under water, or land in the bed of a street.

This approval should be obtained prior to issuing your title report. As soon as is practicable send us a copy of the abstract, survey and proposed title report along with the completed request form. Obtain photocopies of the request form as needed.

Notwithstanding the above, whenever policy liability exceeds $2,500,000.00 there must be a current full search. This applies to all examinations, including refinances.

Date: 12/14/05
Re: Covenants, Restrictions, Easements and Agreements

This memo establishes this company's standards regarding reporting Covenants, Restrictions, Easements and Agreements, etc.

When issuing an Owner's policy (even if the examining standards permit a short period search) the public record of covenants, restrictions, easements, agreements and similar instruments must be set in the title report.

An exception which relates to restrictive covenants and agreements and which states "none in period searched" is meaningless, inappropriate and does not protect us in any way.

When issuing a simultaneous Lender's policy along with an Owner's policy the same covenants, restrictions, easements and agreements must be set forth in the report and requests for affirmative insurance will be considered on a case-by-case basis.

When insuring a mortgage refinance, and there has been no change of ownership, instead of searching for such instruments recorded prior to the last insured deed the policy may set forth the following exception:

"Covenants, restrictions, easements, agreements and similar instruments of record, if any; but policy insures that notwithstanding said instruments, the existing improvements on the premises may remain undisturbed, that the use of the premises for residential purposes will not be impaired, and no provision for the forfeiture or reversion of title will be enforced".

Any request to affirmatively insure against the enforcement of any restrictive covenant involving proposed new construction, against the enforcement of a type of use or to insure that existing violations may continue undisturbed must be referred to this office for considerations and approval.

Date: 12/14/05
Re: Examination Standards For Improved One-to-Four Family Residential Property

This memo supersedes our memo of July 17, 2003 and establishes this company's current examining standards.

When you are requested to issue a policy in connection with a resale or a mortgage refinance and the underlying property is an improved one-to-four family residence the following requirements apply:

You may assume title good in the grantee of the last insured deed if the grantee

1. purchased for a valuable consideration,

2. the deed to that grantee has been on record for at least two years, and

3. that when grantee took title there was an institutional purchase money mortgage executed as part of the acquisition transaction.
   

• If there is no institutional purchase money mortgage executed by the referred to grantee a full search must be run.

• None of the above applies to commercial property, vacant land, or residences comprised of more than four units.

• Regardless of the above, if the policy to be issued exceeds $2,000,000.00 a full search (with all the trimmings) is required 

Date: 12/14/05
Re: High Liability

"See 11/29/06 update"

Date: August 25, 2005
Re: Duplicate Original Documents

Too often the City Register and metropolitan area County Clerks have been losing or misplacing original documents that have been submitted for recording. To avoid the difficulty of recreating documents and finding the parties to re-execute them we urge you to keep a copy of the deed and mortgage in your file and to persuade the buyer's or lender's attorney to keep an executed duplicate original deed in his or her file.

With respect to pay offs of existing mortgages in addition to copies of the pay off letter, forwarding letter, payoff check, payoff indemnity and overnight tracking information you should also include a copy of the HUD-1.

Date: August 25, 2005
Re: Bankruptcy (Reminder)

The standard discharge in bankruptcy does not remove a creditor's recorded lien against the debtor's property.  This discharge only terminates the debtor's obligation to pay the debt.  After the discharge the lien remains against the property and can be enforced by the creditor if, as and when the property passes to a subsequent owner.

Before we will insure a sale or re-finance free of the liens the debtor must proceed under Section 150 of the New York Debtor & Creditor Law and obtain and file an unqualified discharge of the specified liens.

Date:  07/21/05
Re:     Onondaga Indian Land Claim

The Onondaga Indian Nation has laid claim to a vast tract of land in central New York State running from the St. Lawrence River to the Pennsylvania border. The area, though vaguely described, covers all or part of 11 counties, to wit:  Broome, Cayuga, Chenango, Cortland, Jefferson, Lewis, Madison, Onondaga, Oswego, Tioga and Tompkins. (See approximation map attached).  This memorandum sets forth our underwriting position with respect to insuring title within the claimed area.  With respect to 1-4 family residents only, this company will insure mortgages made to institutional lenders and will insure bona fide purchasers for value. The title report and the loan policy must contain the attached Onondaga Indian Claim exception with its included affirmative insurance.  We will not insure a present owner who is seeking to insure previously uninsured property.  You may not insure any other type of property without the express permission of this office.  You may not insure any transaction if the present owner is one of the following entities:

The State of New York
Onondaga County
The City of Syracuse
Honeywell International, Inc.
Trigen Syracuse Energy Corporation
Clark Concrete Company, Inc.
Valley Realty Development Company, Inc.
Hanson Aggregates North America

The specific exception with the included affirmative insurance is attached.

Onondaga Indian Claim Exception (with affirmative insurance) The premises lies within the area claimed by or on behalf of the Onondaga Indian Nation and such rights, title or interests that may be established in favor of said Indian Nation or members thereof are excepted from coverage. Notwithstanding, this policy insures against loss or damage arising from a final unappealable decision, in favor of the claimant, adversely affecting  the insured's title or impressing a lien on the premises. In addition, this policy insures against loss or damage by reason of the unmarketability of title (as hereinafter defined) resulting from said claim. With respect to said claim, the offer of this company, or any other licensed title insurance company, to insure at its regular rates the title to the said premises in the manner herein set forth shall be conclusive evidence of the marketability of the title hereby insured. The company agrees upon request of any mortgage or vendee of the insured or the mortgagee of such vendee, to issue its policy containing the same affirmative coverage set forth above but subject to the same condition.

This company shall not be liable for any loss suffered by the insured by reason of a proposed purchaser, mortgage or assignee rejecting title or refusing to make a loan or refusing to purchase the mortgage by reason of the Onondaga Indian Nation claim against the premises provided that insurance is available as above described.

Date:  07/21/05
Re:     Shinnecock Indian Land Claim

The Shinnecock Indian Nation has laid claim to a vast tract of land comprising part of the Town of Southampton in Suffolk County.  The area affected is bounded west by the Shinnecock Canal, north by Great Peconic Bay, south by Shinnecock Bay, and east by a somewhat indefinite line that runs from the head of Heady Creek north to the southeasterly point of Bullhead Bay.  This memorandum sets forth our underwriting position with respect to insuring title within the claimed area.  With respect to 1-4 family residents only, this company will insure mortgages made to institutional lenders and will insure bona fide purchasers for value. The title report and the loan policy must contain the attached Shinnecock Indian Claim exception with its included affirmative insurance. We will not insure a present owner who is seeking to insure previously uninsured property. You may not insure any other type of property without the express permission of this office. You may not insure any transaction if the present owner is one of the following entities:

The State of New York
The County of Suffolk
The Town of Southampton
Shinnecock Hills Golf Club
National Golf Links of America
Parrish Pond Associates, LLC
Parrish Pond Construction Corporation.
PP Development Associates, LLC
Sebonac Neck Property, LLC
Southampton Golf Club, Inc.
409 Montauk, LLC
Southampton Meadows Construction Corp.
Long Island Railroad or Metropolitan Transit Authority
Long Island University

  You may not insure any transaction affecting land withing the claim area described as:

land shown on "Map of Parrish Pond Associates", filed April 20, 2001 as Map No. 10609
land described in Liber 12280, page 230
land described in Liber 12372, page 587
land lying within the bounds of the Shinnecock Hills Golf Club
land lying within the bounds of the National Golf Links of America
land lying within the Southampton Golf Club
land now or formerly a part of Long Island University or Southampton College
land lying within the Shinnecock Indian Reservation. 

The specific exception with the included affirmative insurance is attached.

Shinnecock Indian Claim Exception (with affirmative insurance)  The premises lies within the area claimed by or on behalf of the Shinnecock Indian Nation and such rights, title or interests that may be established in favor of said Indian Nation or members thereof are excepted from coverage. Notwithstanding, this policy insures against loss or damage arising from a final unappealable decision, in favor of the claimant, adversely affecting  the insured's title or impressing a lien on the premises. In addition, this policy insures against loss or damage by reason of the unmarketability of title (as hereinafter defined) resulting from said claim. With respect to said claim, the offer of this company, or any other licensed title insurance company, to insure at its regular rates the title to the said premises in the manner herein set forth shall be conclusive evidence of the marketability of the title hereby insured. The company agrees upon request of any mortgage or vendee of the insured or the mortgagee of such vendee, to issue its policy containing the same affirmative coverage set forth above but subject to the same condition.

This company shall not be liable for any loss suffered by the insured by reason of a proposed purchaser, mortgage or assignee rejecting title or refusing to make a loan or refusing to purchase the mortgage by reason of the Shinnecock Indian Nation claim against the premises provided that insurance is available as above described.

Date:  June 29, 2005
Re:     Yonkers Tax Increase         

          The Yonkers Transfer Tax is increased to 1.5% effective on any deed delivered on or after July 1, 2005.

          The new RPT form with the increase is not yet available.  The old RPT form should be used with the tax rate changed in pen.  This is the same procedure used the last time the Yonkers tax was amended.

Date:  June 29, 2005
Re:     Incoming Requests for Letters of Indemnity

          There have been several incidents recently where, in response to a request for clearance, the agent of the prior insurer has sent our agent a copy of the "Request for Letter of Indemnity" but we have never received the actual letter of indemnity from the underwriter.  Omitting exceptions based only upon receiving the other agent's request to its underwriter is dangerous - for whatever reason either the request doesn't get to the underwriter or the underwriter doesn't act on it.

          Every effort must be made to receive the letter of indemnity or receive assurance from the underwriter (not the agent) that the letter is forthcoming before omitting the pertinent exception(s).

Date:  June 2, 2005
Re:     Property Under Foreclosure

         This will clarify our requirements for insuring title when the premises are subject to a current foreclosure action.          
          A)   When title is to be acquired from the Referee in the foreclosure action:

1.      The request for continuation at the time of closing must include a request to review the foreclosure action to determine if any proceedings have taken place since the original examination;
2.      The Referee's Deed must be delivered at closing;
3.      The Referee's Report of Sale, with proofs of publication and posting of the Notice of Sale, must be presented at closing for filing and must be reviewed at the time of closing for compliance with the requirements of Section 231 of the RPAPL.
4.      Affidavit from the individual proposed insured or a principal of the proposed insured entity attesting that the foreclosed owner or any one related to the foreclosed owner is no longer in possession of the premises.

          B)   When title is to be acquired from the foreclosed owner, the mortgage paid off and the action terminated:

1.      A current pay-off letter must be obtained.  If it is from the lender it must wet forth the legal fees as well as the usual pay-off figures and must be confirmed with both the issuer and the foreclosing attorney.  If issued by the foreclosing attorney it must be confirmed with the issuer;
2.      If a Judgment of Foreclosure and Sale has been entered we require a letter from the foreclosing attorney stating that no sale date has been set, or, if a sale date has been set, a letter must be sent to the Referee at the conclusion of the closing advising the Referee of the cancellation or adjournment of the sale;
3.      A Stipulation must be delivered at the closing discontinuing the foreclosure action, canceling the Notice of Pendency and, if appropriate, vacating the Judgment of Foreclosure and Sale.  In the absence of such a stipulation we will accept on unequivocal undertaking by the foreclosing attorney to accomplish the above within 30 days.

          All of the above requirements result from situations where pay-off letters were incomplete and satisfactions weren't forth coming, and where Referee's conducted sales when the mortgage had already been paid off.  (The right hand didn't know what the left hand was doing)

These procedures should prevent claims.
 

Date: 2/15/05
Re:     NY State Department of Taxation and Finance
          Contact for Mortgage Tax and Transfer Tax Information    

          In an effort to provide more efficient service, the Tax Department has established a new toll free telephone number to address mortgage recording tax (MRT) and NYS real estate transfer tax (RETT) questions. This new toll free number, 1 888 698-2914, connects directly to a new unit in the Tax Department's Taxpayer Contact Center (TCC). Beginning Monday, February 14, 2005, calls made to the Technical Services Division extension ((518) 457-0556) will automatically be transferred to the TCC line. Callers will receive a message with the new "888" number and well be asked to use that number in the future.           The new TCC unit has been trained and will continue to receive training regarding frequently asked MRT and RETT questions. It is anticipated that TCC will be able to handle many routine calls, and the more difficult calls will be referred to the Technical Services Division.           In addition to the new telephone number, a special email address has been set up for title companies and legal professionals to directly contact the Technical Services Division regarding more complex questions. The email address is NYSMortgageandTransferTax@tax.state.ny.us.  Alternatively, complex questions may be faxed to (518) 435-2918.           Emails and faxes should include a contact name, telephone number and details of your question. Once the information is reviewed it is generally necessary to obtain follow up information. If so, the response will be by email, fax or by telephone.

          If an immediate response is required indicate at the top of your fax or email, "Closing in Progress". However be prudent - don't abuse this priority request.

Date:     December 8, 2004
Re:           Hospital Liens

Under no circumstances are you authorized to take an escrow to dispose of a Hospital Lien.  The amount stated in the lien continues to accrue.  In a recent matter a nominal $6,000.00 lien had grown to over $100,000.00.

You must obtain a current payoff letter, confirm the amount at closing and effect the payoff in the same manner as you would payoff a mortgage.

Date:     November 22, 2004
Re:           Co-op Sales / Estimated Income Tax

The attached memorandum from the New York State Department of Taxation and Finance to County Clerks/Recording Officers is forwarded for your information.

Form TP 584 has been revised and new Form IT-2664 has been created to deal with co-op transfers.  The changes apply only to co-ops.  There is no change affecting transfers of real property and the existing form of the TP-584 may continue to be used for all real property sales.

Date:     July 20, 2004
Re:        TP584 - Penalties and Interest for late payment - Nassau County

        The attached letter from the Nassau County Clerk to the New York State Land Title Association describes a new impediment to the recording process.  Hopefully, there will be a "speedy receipt turnaround" but I wouldn't hold my breath waiting for it to happen.

Regardless, you must adopt procedures to administer this new situation without further slowing the recording process.

Washington Title is not responsible for interest and penalties imposed on the seller.  You may be if the tax is not paid within 15 days.

Date:     July 6, 2004
Re:           ACRIS 2.1: E-TAX FORMS

For all closings after July 3, 2004, New York City will require that the "New York City Real Property Transfer Tax Return" (NYCRPTT); the New York State "Combined Real Estate Transfer Tax Return, Credit Line Mortgage Certificate, and Certification of Exemption from the Payment of Estimated Personal Income Tax" (TP-584); and the "Real Property Transfer Report" (RP-5217NYC) be prepared and entered electronically on the ACRIS system.  One of the enhancements made to the Cover Page application, is that the information on the completed E-Tax forms will be the basis for the preparation of the Cover Page.  The E-Tax form tutorial on the ACRIS web site is a valuable tool. There are two methods of complying with the E-Tax form requirements.  If at closing all of the E-Tax forms have been completed 100% correctly and have been signed, those forms may be submitted with the documents to be recorded in lieu of the currently used paper versions.  If the E-Tax forms have not been completed 100% correctly, you may use the current paper versions of those forms, which must be signed, and then create the E-Tax forms post closing in your office.  Because you will have the current paper version signed, the E-Tax forms need not be signed, but they must be printed out and submitted with the paper version. As to any closing occurring prior to July 3, 2004, if the papers are submitted to the Register's office prior to July 5, the E-Tax forms are not required, only the currently used paper versions of all forms will be required. As to any closing occurring prior to July 3, if the papers are submitted to the Register's office after July 5, the Register has agreed to accept the documents for recording without the E-Tax forms, but with the paper forms and only for a limited period.  You must not delay in getting the papers submitted to the City Register's office. As the E-Tax form application has been designed, if the attorney for one of the parties prepares the forms, that attorney will be the only person who can access the forms, unless that attorney gives his login information (which is both his Customer ID and his Customer Keyword) to a third person who is intended to have additional access to the E-Tax forms.  ONLY if the E-Tax forms have been printed out in the FINAL form (if not in FINAL form, the word DRAFT will appear across the printed pages), are 100% accurate and have been signed, may you take those signed E-Tax forms at closing.  Please note, that if any information on the E-Tax forms is incorrect, even if the middle initial of the name of one of the parties is missing or incorrect, that E-Tax form may not be used.  If not in FINAL form or if not 100% accurate, those E-Tax forms cannot be used, and they cannot be accessed unless you have both the original preparer's Customer ID and the Customer Keyword.  The paper versions of the Smoke Detector Affidavit for 1 and 2 family dwellings; the Property Owner's Registration Form; and the Customer Registration Form for Water and Sewer Billing may continue to be used.  If the ACRIS E-Tax version of these forms is used, they must be signed by the appropriate party(ies). Your closers must obtain either the completed and 100% accurate E-Tax forms, or the completed and 100% accurate paper versions of the necessary forms for recording. IT IS YOUR RESPONSIBILITY TO INSTRUCT YOUR CLOSERS REGARDING THE NEW PROCEDURES FOR CLOSING INVOLVING PROPERTY LOCATED IN NEW YORK CITY.       Please have all of your personnel who are involved in the recording process review the E-Tax form tutorial on the ACRIS website.  The ACRIS website is at :

http://www.nyc.gov/html/dof/html/acris.html

In many transactions, not all of the E-Tax forms will be required.  The E-Tax program has been designed with that in mind.  For example, you will not need the RP-5217NYC for the recording of a lease or assignment of lease.

If the parties do not deliver to you at closing all the necessary E-Tax forms, but only the paper versions of the forms, you will have to enter the data and prepare the E-Tax forms post closing.  In that situation, you are permitted to charge for that additional service, at a price that you determine is appropriate.

Date:  6/25/04
Re:        Richmond County Register's Office - Intake Department Procedures                    

          This is a reminder that since April 30, 2004 all instruments offered for recording in Richmond County must be presented first to the Intake Department. There they will be reviewed. If complete they will be forwarded to the Examination Department for recording approval. Documents which are not complete and/or missing required attachments will be rejected at the Intake Department and will be rejected at the Intake Department and will be returned WITHOUT HAVING BEEN CLOCKED IN. This is very likely to result in interest and penalties being imposed when the documents are corrected and re-submitted.

          Every effort must be made to see to it that documents are proper when first submitted.

Date:     April 6, 2004
Re:          Application of Mutual Indemnification Agreement

Enclosed is a copy of the latest compilation of interpretations of the application of the Mutual Indemnification Agreement by the participating companies.

I particularly call your attention to item #6.  When Washington Title is the Indemnitor, the acknowledgment of liability is to be signed by an officer or authorized employee of the underwriter, not the agent.  When Washington Title is the Indemnitee, the Indemnitor (underwriter) similarly must sign the acknowledgment of liability.

Note also that the signer's name must be printed below his or her signature.

Date: 12/3/03
Re:     Discounted Rates for Refinance and Subordinate Mortgages

          As you know, Section 14 of the Title Insurance Rate Service Association ("TIRSA") Rate Manual, filed with the Superintendent of Insurance of the State of New York, mandates a reduced premium when application is made for a loan policy and certain conditions exist.           Section 14 contains the following provision: "In order to ensure consumer awareness of this Section, each Company shall include the following statement, in bold print, on the face of each application confirmation."           IF THIS IS A REFINANCE WITHIN TEN YEARS, YOU MAY BE ENTITLED TO A REDUCED PREMIUM. CONTACT THIS COMPANY IMMEDIATELY FOR DETAILS.           It has been alleged that there are instances where appropriate applicable rates have not been charged. It is your responsibility to assure that the discounted rate is charged if applicable.           If the information justifying the discounted rate is not made available at the time application is made, it should become apparent from the abstract of title. Instruct your readers to be aware of this requirement and to advise the proper people in your organization to adjust the premium charges when necessary.

          We are not accusing anyone of errors in establishing premium rates. The purpose of this memorandum is to remind and re-emphasize the requirements of Section 14 of the Rate Manual.

Date: 11/6/03
Re:     Proof of Heirship

          There have been several claims recently arising from the failure to properly establish the heirship of an intestate decedent. This usually results from our accepting affidavits of heirship that are incomplete, misleading or deliberately false.           Effective immediately it is the policy of this company to require intestate succession to be proven in Surrogate's Court. All title reports must contain the following exception: "If title is to be acquired from the distributees of a record owner of the premises described in Schedule A, Company requires that heirship be proven in Surrogate's Court, either in an Administration Proceeding or a Probate of Heirship. Affidavits of heirship alone will not be acceptable proof."           For your information Administration Proceedings are covered in Article 10 and Probate of Heirship in Section 2113 of the Surrogate's Court Procedure Act.           Also, in those situations where you have raised a question about proof of death and heirship in the chain of title and have requested clearance from a prior insurer, the production of copies of affidavits will not be sufficient to justify omitting your exception. If the Mutual Indemnification Agreement is not applicable a Letter of Indemnity must be requested and received prior to closing.

          Any request for deviation from these requirements must be approved by this office.

Date: 10/23/03
Re:     Escrow Agreements  

          It is essential that you remind your closers that our form of Escrow Agreement is a two-sided document. The second page of the agreement contains several important provisions that we want the Depositor to be aware of. When giving the Depositor a copy of the Escrow Agreement the closer must giver him/her a copy of both sides.

Date: 9/26/03
Re:     Mutual Indemnification Agreement    

          Effective September 24, 2003 Washington Title Insurance Company has signed a Mutual Indemnification Agreement with other underwriters. Currently nine licensed title insurance underwriters are participants in the arrangement. In addition to Washington the agreement has been executed by Chicago Title, Commonwealth, First American, Lawyers Title, Old Republic, Stewart Title, Ticor and Transnation Title.

The purpose of this Agreement is to expedite the process of clearing title exceptions and to reduce the workload associated with the issuance and receipt of letters of indemnity. I've attached a copy of the "Memorandum on Mutual Indemnification Agreement" which describes how the Agreement is to be implemented and I have also attached an information sheet entitled "Application of Mutual Indemnification Agreement", which documents several interpretations that have been agreed upon by the signatories. Additional interpretations will be distributed.

Caveats

         1)             Not all exceptions may be disposed of by the terms of the Agreement. The attached memorandum sets forth the list of "Covered Defects". It also lists matters which are specifically not covered.           2)             Not all underwriters have committed to this undertaking. Others may join and you will be so advised. With respect to those companies that have not yet executed the Agreement, the current practice of accepting and issuing letters of indemnity will continue.           3)             The Agreement does not cover the subject of "mortgage only" letters. The current practice with respect to such letters will continue.            4)             The Agreement does not require that a company, in any particular instance, accept coverage under the Agreement. You may still request a traditional letter of indemnity for a "Covered Defect". (See item #5 below)           5)             The Agreement limits the liability of the Indemnitor company to the face value of its policy plus legal fees, etc. There may be cases where it would be appropriate to request a standard form of letter of indemnity as set forth in the New York State Land Title Association, Inc. Recommended Practices and Forms, January 2002. The recommended forms have no limitation of liability. Consider this option in instances where a break in the chain of title might result in a total loss under the currently issued title policy.

 Procedures

          a)             To omit an exception from your title report based on the Agreement you must first determine that the exception  relates to a "Covered Defect" (See the list in the Memorandum attached).           b)             Obtain a copy of the insured owner's policy or "marked up" title report. This is essential in order to determine that a prior policy was issued, to confirm that the objection in question was not excepted in the prior policy, and to determine, when required, the face value of the prior policy.           c)              Retain a copy of the "marked up" report or prior policy in your title file and mark the exception in your report "omit per Mutual Indemnification Agreement - See copy of prior policy herewith".

Conclusion

There will be unforeseen wrinkles that will tend to disrupt the smooth transition to this new system. Cooperation and patience will be essential to success. As questions arise call us; we will do our best to answer them.

Date: 7/17/03
Re:     Examination Standards    

          The following examining guidelines apply when we are asked to issue title insurance in connection with a mortgage refinance of improved one-to-four family residential property.           You may assume title good in the grantee(s) of the last insured deed provided

a)                 the deed was given for a valuable consideration as determined from the notation of the amount of transfer tax paid, and b)                 an institutional purchase money mortgage was executed at the time the said grantee(s) took title.

You need not examine the prior chain of title, run names of prior owners, nor turn out mortgages made by prior owner(s) unless such a prior mortgage is recited in the deed, the purchase money mortgage or a subsequently recorded instrument, assigned to the purchase money mortgagee or extended, modified or consolidated.

CAVEATS

        1)             These guidelines do not apply to vacant land, commercial property or multiple residential dwellings exceeding four family units. In such cases a full examination is required.         2)             When insuring a refinance under the standard set forth above and there is no change of ownership that is being insured you need not search for covenants and restrictions, easements and agreements recorded prior to the last insured deed, however the title report and policy must set forth the following exception and affirmative insurance:

"Covenants and restrictions, easements and agreements of record, if any, however policy insures that the existing improvements on the premises may remain undisturbed, the use of the property for residential purposes will not be impaired, and no provision for the forfeiture or reversion of title will be enforced."

        3)             You are all title professionals. We expect that you will recognize and be aware of unusual or seemingly risky situations and apply your expertise in considering the possible need for further examination.         4)             You are reminded that all title reports issued in matters to be insured for more than $1,000,000.00 must be submitted to this company for approval.

We are always available for consultation and review of underwriting questions.

Date: 5/20/03
Re:     Department of Finance/Certified Checks   

          The enclosed notice from the NY State Land Title Association sets forth the Department of Finance rules for acceptance of uncertified checks.

Date: 3/24/03
Re:     ACRIS Documents - Proof of Recording

          Despite all of the present and potential advantages afforded by the ACRIS system there are some drawbacks.           One drawback is the ability for someone to create what appears to be a copy of a recently recorded instrument. This is possible because, under the ACRIS system, an actual recorded instrument doesn't show any recording information or recording office official stamps.           Therefore, a photocopy of a document that is purported to be a copy of an instrument recorded in the New York City ACRIS system is not acceptable proof of such recording.

          You must establish through the ACRIS system that the instrument in question is actually recorded. A certified copy is an acceptable alternative but only if it exhibits the raised seal of the register.

Date: 1/23/03
Re:     NY State Franchise Tax and New York City Business Corporation Tax   

          In exercising our underwriting discretion we have decided that we will no longer require that you raise an exception for New York State Franchise Taxes and/or New York City Business Corporation Taxes against domestic or foreign corporations, business trusts or limited liability companies appearing back in the chain of title.

          You will still raise the exception when such an entity is the present owner, an intervening grantee between the present owner and the insured, or the mortgagor to the insured lender.

Date: 8/1/02
Re:     Municipal Departmental Searches      

          Municipal departmental searches are forwarded by us to our customers as a courtesy to assist in the closing of their transactions. They are provided for information only and they are not included within the policy coverage.

          Even if we accommodate our customer and pay off, on it's behalf, some item(s) disclosed by the search report we are not to mark the report "paid", "omit" or any other similar notation.

Date: 6/3/02
Re:     Federal and New York Estate Taxes      

          Recent congressional legislation (The Economic Growth and Tax Relief Reconciliation Act of 2001) has effected substantial changes in federal estate taxes and has also had an impact on New York estate taxes.           The charts shown below indicate the time periods and the federal gross estate thresholds below which no estate tax return needs to be filed and no estate tax is due.

New York State

There is no federal estate tax for persons dying in the year 2010 and thereafter, on 1/1/11, the threshold drops to $1,000,000. Please take note of the following: It is the value of the federal gross estate that is the determining factor as to whether or not the threshold has been reached in considering the applicability of either New York or Federal estate taxes. We work only from the gross estate; we do not presume to determine the value or applicability of any claimed deductions or exemptions, excepting the marital  exemption for the property passing to a qualifying surviving spouse.

This information should cover most of the situations that you are likely to run into. Our office is always available to help with the unusual problem that might arise.

Date: 5/30/02
Re:     Survey Inspections    

          This is a reminder!           The Rate Manual filed with the New York State Insurance Department contains the following language:           Section 27 - SURVEY INSPECTION COVERAGE                       (A)...                       (B) Survey Inspection Coverage is limited to 1-4 family residential property.           Where you are insuring property other than a 1-4 family residence and you are "reading" a survey (other than a current survey) you must conclude the survey exception with the following language:

          "Subject to any state of facts an accurate survey made since (date of the survey used) would disclose."

Date: 3/4/02
Re:     Federal Tax Lien Payoffs      

The IRS has changed the procedure to be followed to request disclosure of outstanding amounts due on Federal Tax Liens. The IRS is standardizing the procedure nationwide to better ensure taxpayer privacy. They are requesting that title companies and agents, as well as attorneys, submit Form 8821, Tax Information Authorization. The form must be signed by the taxpayer, then faxed back to the IRS. The taxpayer authorizes the IRS to disclose the amount of all Federal taxes due.

The form can be located on the IRS web page, www.irs.gov/pub/irs-pdf/f8821.pdf.

Date: 12/4/01
Re:     Insuring Title Through Mortgage Foreclosure

          There has been an increase in the number of claims on policies covering titles insured through foreclosure actions. Often these claims are based on an allegation that the foreclosed owner of the property was not served, or not properly served, with the Summons and Complaint in the foreclosure action. The claim usually arises when the purchaser of the property through the foreclosure sale tries to gain possession, often by evicting the foreclosed owner, who seeks to upset the Judgment of Foreclosure and Sale and the Referee's sale by alleging that he/she was not properly served. Even if we are successful in defeating the claim of lack of service, the defense of the title is very costly.           Even if it appears from your examination of the foreclosure action that the owners were served, we will not insure title if the owner is still in possession of the premises. In an attack on the validity of the foreclosure action we are not protected by the exception "Rights of tenants, occupants or persons in possession."           This concept also applies to tenants who have recorded a lease or memo of lease. Similarly, you may not omit the interest if that tenant remains in possession of the premises.           We will require proof that the owner (or tenant) has vacated the premises. This proof must be by an unequivocal affidavit by our proposed insured fee owner setting forth facts from which we can determine to our satisfaction that our underwriting requirement has been met. If the proposed insured is an entity other than an individual, the affidavit must be sworn to by an authorized officer, general partner or managing member of the entity. If the purchaser of the property is not getting title insurance, and we are only insuring a mortgage, the affidavit must be made by the purchaser and someone on behalf of the insured lender.

          Any deviation from this policy must be approved by this office.

Date: 5/21/01
Re:     Revised Remittance Form Coding List    

          Attached please find the revised Agency Remittance Form Coding List that has been approved by the New York State Insurance Department.

Please call with any questions.

Date: 8/24/00
Re:     TIRSA Endorsements (Loan Policy) (1-4 Family) 9/1/93

          It has come to our attention that there may be some misunderstanding as to under what circumstances the survey endorsement may be issued.           The following conditions and underwriting requirements must be met:

               1.    The endorsement may only be issued for a Loan Policy. In the absence of an acceptable survey and Owner's Policy must contain the following exception: Any state of facts an accurate survey would show;                2.  The endorsement is only available if the premises are used, or to be used, for the 1-4 family residential purposes;                 3.   The premium for the endorsements is 10% of the unreduced (straight) mortgage premium; and                 4.  Proof must be obtained by acceptable affidavit that:                     a.       there has not been any dispute with a neighbor with respect to the location of any structure or with respect to location of property lines;                     b.       the structures on the premises have been in existence in their current condition for at least two years; and                     c.  no one is claiming or exercising any easement rights over the premises other than as disclosed in the title report.

If the proof required in paragraph 4 above cannot be obtained the endorsement may not be issued without the approval of this office.

If there are any questions please call.

Date: 9/13/99
Re:  Acknowledgments - a further update

          We have been advised that, when an instrument is executed pursuant to a Power of Attorney, the New York City Register will require that recording information regarding the Power of Attorney be set forth below the attorney-in-fact's signature line. We are informed that Nassau County has and other jurisdictions may also institute a similar requirement.

          Therefore, to facilitate prompt recordability the following guidelines are to be followed:

1               1.)  Where the Power of Attorney is being recorded simultaneously with the instrument, the signature           line should be as follows:

                                                                                John Doe           By:                                                                 Attorney-in-fact by Power of Attorney           being recorded simultaneously herewith

2               2.)  Where the Power of Attorney is already of record in the county where the subject property is located,           the signature line should reads as follows:

                                                                                            John Doe           By:                                                                 Attorney-in-fact by Power of Attorney           Recorded in (Reel) (Liber)                  page               .

          Call this office if you have any questions.

Date: 7/6/99
Re:     Covenants, Restrictions, Easements, etc. appearing in closing deed(s)

          It should be fundamental but some title closers need to be reminded that they must thoroughly review the closing deed(s).           Claims have arisen because of the imposition of new covenants, restrictions or easements in the closing deed, which are not then excepted in the title policy.           Closers must make sure that, when this occurs, the applicants' marked up reports as well as the company's report contain an added exception for these items and that the loan policy is not delivered until an additional appropriate exception has been added.

          Please bring this reminder to the attention of all your closers.

Date: 7/6/99
Re:     Mortgage payoffs and follow up for Satisfactions      

          The delay in obtaining and recording satisfactions of mortgages paid off at closing has become a distinct problem. It results in time consuming and otherwise unnecessary port closing clearance requests, file review and often the issuance of letters of indemnity.           There are two ways to help alleviate this problem.           Firstly, provide the holder/servicer with all the information needed to prepare a proper Satisfaction of Mortgage. The letter forwarding the payoff funds must clearly indicate where the satisfaction is to be sent and, in addition to including a copy of the bank's payoff letter, should also include a copy of the appropriate mortgage schedule as copied from the title report.           Secondly, implement and utilize a follow up system to insure that the satisfactions are ultimately obtained. It is the agent's responsibility to follow up. However, to have necessary tolls for effective follow up, it is essential that the closers be instructed to attach copies of the following documents to the marked up title report:

            1)                 Letter forwarding the payoff funds;             2)                 Updated payoff letter;             3)                 Payoff check(s);             4)                 Overnight delivery receipt;             5)                 Mortgage schedule; and 6)                 Sellers payoff indemnification. (form enclosed)

Closers are adequately compensated for their part in initiating the process of paying off and satisfying these mortgages so there should be no reluctance on their part in complying with these requirements. If it becomes necessary to request a letter of indemnity where a satisfaction has not been received, send us copies of the above documents and continue with efforts to obtain and record the satisfaction.

Attachment

Date: 1/27/99
Re:     Additional Real Estate Transfer Tax on conveyance in the
           five eastern towns of Suffolk County (Peconic Bay Region)

          In the towns of Southold, Riverhead, Southampton, East Hampton and Shelter Island voters approved the imposition of additional transfer tax upon the recording of conveyances on or after April 1, 1999 (March 1, 1999 for the Town of Southold).           The tax rate is 2% and is to be paid by the grantee at the time of recording. The Suffolk County Treasurer will provide the required form which is to be identical with the TP-584 except to the extent that it must reflect the provisions of this new statute.           In the towns of East Hampton, Shelter Island and Southampton the first $250,000.00 of the consideration for the improved real property and the first $100,000.00 of the consideration for unimproved real property is exempt.           In the towns of Riverhead and Southold the exemption for improved property is $150,000.00 and for unimproved property is $75,000.00.           Conveyances pursuant to a written contract executed prior to November 3, 1998 are exempt.           The statute also lists certain conveyances which are exempt and provides for credits in certain instances. These provisions are expected to be delineated on the form or in the instructions for the form. They are specifically set forth in Tax Lax Section 1449-ee.

          Agents are reminded that the date of recording, not the date of closing, determines the applicability of the tax. In adopting an appropriate cut off date for picking up the required tax consider your time requirements for retrieving closing papers from closers, processing documents and submitting them for recording.

Date: 10/23/98
Re:     Requests for clearance and for letters of indemnity

          The following procedure is to be followed when you receive a request from a current insurer to justify your having omitted, or not raised, an exception that the current insurer is now raising:

          1)             The agent is to promptly review its file to determine the basis for the prior omission and is to provide the current insurer with copies of the documentation, i.e., affidavits, etc. on which the prior omission was based.           2)             If our insured is still in title, and, if the current insurer is not satisfied with the proofs that have been submitted, then, and only then, the file is to be referred to Washington Title along with a Request for (Indemnity/Benefit) Letter. (See attached sample).           3)             Requests for Escrow Benefit letters are to be accompanied by a copy of the escrow agreement and confirmation that the escrow funds are still being held.           4)             Requests for Mortgage Only letters are to be accompanied by copies of the payoff statement, the check and the forwarding letter.

Prompt and courteous handling of these requests is important. Not only do we owe it to our insured but it will pay dividends when we seek cooperation from others.

Date: 7/30/97
Re:     Duration of New York State Tax Warrants as liens against real property

          The confusion regarding the duration of the lien of a state tax warrant, which arose in 1988 when the Department of Taxation and Finance adopted the position that the lien of the warrant was good for twenty years, has now been resolved.           Ch. 176 of the laws of 1997, effective July 8, 1997, enacted Section 174(a) of the Tax Law which provides that, notwithstanding any provision of any law to the contrary, the provisions of the CPLR shall apply. CPLR Section 5203(a) provides that a judgment is a lien for ten years from the date of it's docketing.

          It's this company's position that the ten year period applies to existing tax warrants as well as tax warrants which are docketed after July 8, 1997.

Date: 7/18/97
Re:     Lifetime Trusts (Statutory changes)

          Chapter 139 of the Laws of 1997 has changed the law of New York regarding Lifetime Trusts ("inter vivos" or "living" trusts).           One effect of the new law is to amend EPTL Section 7-1.1 to prospectively abolish the merger doctrine. Until now we have had to consider the possible invalidity of the trust where A is both the beneficiary and the trustee. If A is alive we have been requiring a deed from A, individually and as trustee and if A is dead we require a deed from the successor trustee and from the personal representative of A's estate (or A's distributes). With respect to Lifetime Trusts created after June 25, 1997 we will no longer be concerned with merger.           Caution: The statute is not retroactive - it does not apply to trusts created before the effective date.           A second aspect of the statute is as follows:           Effective 12/25/97, new EPTL Section 7-1.17 provides that a lifetime trust must be acknowledged in the same manner as a conveyance of real property, or it must be executed in the presence of two witnesses, as a will is.

          If you have questions don't hesitate to call.

Date: 5/13/97
Re:     "No Consideration" Deeds

General

"No consideration" deeds are a growing source of significant and costly claims to the title insurance industry. The highest level of caution must be exercised in reviewing the facts and circumstances surrounding "no consideration" deeds, whether they already appear in the chain of title or are being offered in connection with a current transaction.

Deeds in the recorded chain of title

"No consideration" deeds in the chain of title can usually be identified. There may be an indication that no Transfer Tax has been paid or there may be a recital that the deed is given as gift or for "love and affection". It may appear that the deed relates to a family transaction, to a transaction between commercially related individuals or entities, or to some other non-arms length transaction. In all such cases searches must be run against the grantor(s) to date and as much credible information must be obtained about the facts surrounding the conveyance as is feasible. The results of the extended search and the information obtained must be then considered by company underwriting counsel. Factors which will influence the underwriting decision include recitals in the already recorded deed, the length of time the deed has been on record, comparison of the signatures on the deed in question with signatures on other instruments in the chain of title, an explanatory statement by the attorney who supervised the execution and delivery of the "no consideration" deed, and an affidavit by the grantor acknowledging that he/she executed the deed without any undue influence or duress.

Current deeds

Where a previously executed "no consideration" deed is being offered in connection with the current transaction we will require a satisfactory explanation of the facts surrounding the conveyance, photo identification of the grantors, and the re-execution of the deed at the closing or the execution of a confirmatory deed. Any deviation from these requirements requires the approval of company underwriting counsel.