Bulletin: NY000203

Dear Associates:

Given the current level of commitment of American military forces in Afghanistan, Iraq and throughout the world, in addition to those reservists and members of the National Guard being called to active duty, it becomes increasingly relevant to consider the above referenced subjects as they pertain to our daily activity in title underwriting.

Under the terms of the Soldiers' and Sailors' Civil Relief Act of 1940 (50 U.S.C. Appendix, Sections 501-593) ("the Act"), "persons in the military service of the United States" (as that term is defined in the Act) are entitled to certain protections regarding the prosecution of civil proceedings such as mortgage foreclosure and actions to recover possession of real property (eviction).

For our purposes, compliance with the Act, as well as applicable provisions of Article 13 of the N.Y. Military Law, is accomplished in most instances by the filing of an affidavit, in any action affecting title to real property, to the effect that the defendant is not in the military service of the United States and no attorney was appointed to appear and represent the interest of such defendant.

The federal requirement, where the defendant has defaulted in appearance, requires a showing that (a) the defendant was not in the military service of the United States or an ally, (b) that the investigation as to whether the party is in the military service was conducted after the default and (c) that the investigation was performed shortly before it was submitted.

Additionally, where there is a mortgage foreclosure, both federal and state law provide for a stay where the defendant owns real property secured by a mortgage executed prior to the commencement of active duty and continues to own such property during such period of active duty.

As a result, especially for the duration of this period of unsettled world affairs, special care must be taken to make sure that proper "non-military" affidavits are part of any abstract of an action that affects title to real property. In those instances where the existence of such affidavits are not apparent from an examination of the court file, Exception ACTR 12 NY, as same appears in the New York Standard Exceptions of Stewart Title's Virtual Underwriter (www.vuwriter.com), must be raised.

Further, in those instances where an examination of the court file reveals that an attorney was appointed to represent the interests of a person on active military duty and there is no indication of court confirmation of the Referee's Report of Sale in said action, Exception ACTR 13 NY must be raised.

Regarding military powers of attorney, be advised that United States Code Sections 10 USC 1044(a) and 10 USC 1044(b) contain provisions for the execution and acknowledgment of powers of attorney by members of the armed forces. A military power of attorney is usually identifiable by a statement included as a preamble to the document, which identifies it as such and contains a statement prescribed by statute.

You should be aware that the statute confers notarial power on certain categories of persons for any document executed by those in the military and further exempts the military power of attorney from "...any requirement of form, substance, formality, or recording..." provided by state law. This should not be construed to mean that the power submitted for use in your transaction may be anything other than one containing original signatures of both the principal and the "notary" and otherwise suitable for recording with the clerk of the county in which the subject property is located.

Needless to say, the full range of protections available to service men and women afforded by federal and state law are beyond the scope of this Bulletin. To the extent that you have any questions regarding the application of these statutes to your specific situation you are encouraged to contact company counsel for guidance prior to closing.