Consumer complaint received 2016-04-18
Company: Stewart Information Services
State: WA
Product: Mortgage
Sub-product: Conventional fixed mortgage
Issue: Settlement process and costs

Complaint:
The basis of my complaint is that a document not relevant or pertinent to the closing process, that was not provided to Stewart Title by the lender/financial institution was presented to the buyers in our community to sign by Stewart Title. My XXXX neighbors were all presented with this document during the closing process to sign. This document has no relevance as to whether or not the loan closes successfully. This document was given to Stewart Title by the seller, XXXX XXXX. My assumption was the document was required to be signed since it was presented at closing for mortgage. Something my lender required I assumed. I was unfamiliar with the closing process. All I knew was I would be signing a lot of documents. The document in question that I was asked to sign was a Home Buyers Warranty application. In light of what we now know we suspect that this document was presented to the unsuspecting mostly first time buyers during the closing process as a way to easily obtain signatures without the seller having to face questions or provide information about the terms that we are all now aware of that we agreed to by signing the application. Stewart Title presented this application to each buyer to sign at closing for the seller XXXX XXXX. By signing this application the buyer entered into a contract with the seller and the contract had a binding arbitration clause that was not disclosed to the buyer. I would say XXXX % of the buyers were not made aware of this by Stewart Title. In very small, fuzzy print on the application it states that by signing the buyer acknowledges that they have read/reviewed a sample copy of the warranty booklet and that the buyer consented to the terms of these documents including the provisions for binding arbitration. Only XXXX buyer has acknowledged that Stewart Title provided the sample warranty booklet to him at closing. However he had no time to review it prior to signing the warranty application that Stewart Title obtained his signature on. The buyers were unaware and were not informed of the provision for binding arbitration at the time the applications were signed. The sample warranty booklets were not provided by Stewart Title other than to XXXX buyer receiving his. The title rep simply requested a signature on the application for the " warranty that the builder purchased for your new home ''. 

My recollection is that at some point in the middle of the process of signing my closing documents at Steward Title the title rep presented the HBW application for my signature. The title rep said " this is the application for warranty that the builder purchased for your home, I just need your signature here. '' Being that I 'm a first time buyer my assumption was that my lender required a warranty for my new construction home. I signed the document without question and proceeded with signing the remaining documents that the title rep presented to me with short explanations and instructed me to sign. 

Stewart Title did not allocate the funds of the XXXX HOA appropriately. As an example please find a copy of a check in the amount of {$370.00} that should have been allocated to the HOA but was made payable to the builder XXXX XXXX. 

Stewart Title XXXX has a personal relationship with the owners of XXXX XXXX. We suspect this is why funds were not allocated appropriately. The title rep slipped the warranty application in with our closing documents for each purchaser at closing to easily obtain signatures for the seller XXXX XXXX from the buyers without questions being aimed at the seller/builder and the builder not taking responsibility for not providing the sample warranty booklets for review prior to the application being signed. 

This is highly unethical behavior. You should be able to trust the most important person in the buying process ( escrow ) to be honest and transparent.

Company public response: Company believes it acted appropriately as authorized by contract or law
Company response to consumer: Closed