Bulletin: IN2011003

Dear Associates:

This Bulletin is a reminder that if you are asked to insure a sale or mortgage by a court-appointed receiver in a foreclosure, partition or other type of transaction, you must contact an underwriter for approval. Additional requirements to insure may be applicable. In the recent case of Wells Fargo v. Tippecanoe Associates, 923 N.E. 2d 423 (2010 Ind. App.), the Court of Appeals ruled that a receiver appointed in a mortgage foreclosure action does not have the power under Indiana law to sell the mortgaged property subject to the receivership in a private sale absent the consent of the owner-mortgagor.  The Court also held that a pre-default waiver of redemption rights by the owner-mortgagor is not enforceable in Indiana. As a result, this case suggests that a receiver appointed in a foreclosure proceeding only has the power to sell property subject to the receivership if the owner-mortgagor consents to the sale and waives any redemption rights with respect to the property. 

If you have questions related to this bulletin, please contact your local underwriting personnel or Stewart Legal Services.

 For on-line viewing of this and other bulletins, please log onto www.vuwriter.com.