DATE: April 8, 2020

TO: Massachusetts Agents and Approved Attorneys

FROM: Massachusetts Underwriting Department

RE: Underwriting Flexibility and Practice Tips during the COVID-19 Emergency

What a long year these past few weeks have been!

With this in mind, we have created underwriting flexibility and compiled practice tips to be in effect during the COVID-19 state of emergency, which is by no means an exhaustive list of issues or subjects resulting from the present circumstances. We encourage you to reach out to us with any questions, concerns, or if you just need to hear a supportive voice.

Underwriting Flexibility

The COVID-19 crisis has impacted many standard underwriting requirements and practices, and we are, therefore, providing flexibility in the below areas. The following guidelines shall remain in effect until May 4, 2020. We will continue to monitor the COVID-19 situation very closely to determine if these guidelines need to be modified, expanded, or curtailed.

Gap Reminder: We have previously distributed gap coverage bulletins with forms and requirements for transactions between $0-$2 Million and for transactions between $2 Million-$10 Million, and FAQs. Please contact us with any questions.

6(d) Certificates: You may not be able to obtain a notarized 6(d) certificate. Although the statute only requires a statement, and does not require notarization, you may have difficulty recording a non-notarized 6(d) certificate. If you are unable to record such a certificate, you may issue policies without exception for the failure to record the certificate, provided it is retained in your file. The only exception to this flexibility would be if your exam discloses a recorded complaint to enforce a condominium ; in such circumstance, a 6(d) certificate must be recorded to dissolve the lien.

Plot Plans: Some surveyors have been unable to perform their customary "field work" in preparation of a mortgage inspection plan. For 1-4 family residential transactions, you may issue policies based upon a mortgage inspection plan that is drawn without "field work", except for construction projects.

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MLCs and Other Municipal Information: With city and town departments either closed or operating on limited hours, receipt of MLCs may be delayed. Likewise, it might be difficult to obtain information verbally, although some municipal online websites may provide helpful data.

For a purchase transaction, you may request the last two tax bills, and other information from the sellers relevant to municipal services, to confirm the payment of past taxes and municipal charges. For the current tax period, if you are unable to obtain the current tax bill, you may rely on the third quarter tax bill, or you may perform a tax calculation, based on the most recent assessed value, as disclosed on the assessor's website, and the present tax rate, as set by the municipality, which should also be available online. Make sure to add a cushion to your tax calculation and to account for other municipal charges as appropriate. If you cannot obtain any information as to whether past or current taxes or other municipal charges were paid, you must require a holdback. If water/sewer/electric bills are marked "estimated", indicating that an actual reading has not been done, and the seller/owner cannot provide you with a recent paid bill for actual use, you may want to hold back a substantial amount, especially for a multi-family property. Also, you must obtain a "post- adjustment agreement" between the buyers and sellers so that calculations may be re-adjusted once information is again available from the municipality. If the bills indicate that they are paying estimated amounts only, please contact us.

For a refinance transaction, the borrower may be able to offer copies of recent tax bills and evidence of payment, or copies of mortgage statements showing the history of tax payments, in order to establish the current tax status.

If the above criteria are satisfied, you may issue policies that insure taxes and other municipal charges are paid through the appropriate date certain.

Probate Court Records: As you know, physical access to probate court records has been suspended. If there is a need to search a probate court record, please consider using the Massachusetts Trial Court Electronic Case Access program as described in our prior Question of the Week. If you remain unable to access the relevant probate documents, we will consider the following scenarios, on a case by case basis, to determine the need to search a probate court record:

Where title is currently vested in an estate, and the seller's attorney or the probate attorney has provided satisfactory probate documents that were filed and approved by the court, we may be able to insure the transaction without access to the probate records.

Where title involves an older probate, if we are more than 20 years or two bona fide purchasers removed from that probate, we may be able to insure the transaction without access to the probate records.

Where the seller has an owner's policy, and a probate prior to the date of that policy cannot be accessed, we may be able to insure the transaction without access to the probate records.

If your title search discloses a divorce proceeding and you are unable to examine the relevant records, please contact an underwriter to determine if underwriting flexibility is available.

Foreclosures: We will not insure a title originating from a in which an auction is conducted while Governor Baker's State of Emergency is in effect. (NOTE: The original State of Emergency was declared on March 10, 2020.) Additionally, the Federal Housing Finance Agency has directed Fannie Mae and Freddie

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Mac (the Enterprises) to suspend and evictions for at least 60 days due to the coronavirus national emergency. We anticipate that additional constraints involving foreclosure actions may develop subsequent to the date of this bulletin.

Practice Tips

Smoke and Carbon Monoxide Certificates: On March 20, 2020, Governor Baker signed an Executive Order permitting the temporary conditional deferral of certain inspections of residential , to include smoke and carbon monoxide certificates, provided certain criteria are satisfied. The order will remain in effect until it is rescinded or until the state of emergency is terminated, whichever occurs first. Both the Massachusetts Association of Realtors and REBA have drafted suggested addendums to Purchase and Sale Agreements to address this issue.

Land Court: The Land Court Chief Title Examiner, Christina T. Geaney, issued a memorandum, dated March 25, 2020, outlining interim procedures for remote approvals of certain registered land documents. This memorandum only applies to documents requiring approval under the Land Court Guidelines (i.e., probate deeds, bankruptcy deeds, etc.), and not to all registered land documents.

Expired Massachusetts Driver's Licenses: Pursuant to a Governor's Executive Order, anyone with certain credentials expiring between March 1, 2020 and April 30, 2020 will have an active status within the Registry of Motor Vehicles system with an extended expiration date of up to 60 days. The RMV is not providing updated credentials to reflect the extended date. When accepting an expired MA license as a form of identification, ensure it meets the criteria as set by the RMV.

Please do not hesitate to call one of our underwriters for guidance. We appreciate all that you are doing and are grateful for our relationship. Moreover, the health and safety of our agents and their families continues to be of the upmost importance to our Chicago and Commonwealth team.

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