ALTA Endorsements

ALTA 1

Endorsement Attached To And Made A Part
Of Policy Of Title Insurance
Serial Number __________
Issued By

Stewart Title Guaranty Company

Herein Called The Company

Order No.:

The Company insures the owner of the indebtedness secured by the insured mortgage against loss or damage sustained by reason of:

any assessments for street improvements under construction or completed at Date of Policy not excepted in Schedule B which now have gained or hereafter may gain priority over the lien of the insured mortgage.

This endorsement is made a part of the policy and is subject to all of the terms and provisions thereof and of any prior endorsements thereto. Except to the extent expressly stated, it neither modifies any of the terms and provisions of the policy and any prior endorsements, nor does it extend the effective date of the policy and any prior endorsements, nor does it increase the face amount thereof.

Signed under seal for the Company, but this endorsement is to be valid only when it bears an authorized countersignature.

Explanation

This endorsement to the Loan Policy insures against loss by reason of assessments for street improvements under construction or completed at Date of Policy unless excepted in Schedule B. Usually assessment liens are disclosed in the customary tax search. However, assessments for improvements in progress or recently completed may not appear as existing liens in the records of the taxing authority. Assessment liens subsequently perfected may gain priority over the lien of the insured mortgage.

Underwriting Requirements

(1) Verify the existence of existing assessment liens by an appropriate tax search.

(2) Verify by inspection, survey, or affidavit there are no recent street improvements adjoining the premises.

(3) Verify with the applicable municipal department that there have been no assessments; and

(4) Verify that the examination of the public records does not evidence improvements or assessments.

This coverage is automatically afforded in the ALTA loan policies issued in California. However, the tax search in California should reflect such assessments.

 

ALTA Truth-in-Lending Endorsement 2

Endorsement Attached To And Made A Part
Of Policy Of Title Insurance
Serial Number __________
Issued By

Stewart Title Guaranty Company

Herein Called The Company

Order No.:

The Company insures the owner of the indebtedness secured by the insured mortgage against loss or damage sustained by reason of:

any final judgment of a court of competent jurisdiction that either the lien of the insured mortgage has been terminated or the title of the insured who has acquired all or any part of the estate or interest in the land described in Schedule A by foreclosure, trustee's sale, conveyance in lieu of foreclosure, or other legal manner which discharges the lien of the insured mortgage, has been defeated by a valid exercise of the right of rescission conferred by the Federal Truth in Lending Act and that the right or rights of rescission existed because neither the credit transaction evidenced by the insured mortgage nor the right of rescission thereof was exempted or excepted by the provisions of Regulation Z (12 CFR 226).

This endorsement is made a part of the policy and is subject to all of the terms and provisions thereof and of any prior endorsements thereto. Except to the extent expressly stated, it neither modifies any of the terms and provisions of the policy and any prior endorsements, nor does it extend the effective date of the policy and any prior endorsements, nor does it increase the face amount thereof.

Signed under seal for the Company, but this endorsement is to be valid only when it bears an authorized countersignature.

Explanation

This endorsement is issued only in conjunction with a Loan Policy. The endorsement insures the lender against the effect of the termination of the lien by reason of the valid exercise of the right of rescission. The right of rescission may apply if (1) the lien is a security interest in the borrower's principal dwelling and (2) the loan is not a purchase money mortgage, and (3) the borrower is a natural person.

Underwriting Requirements

This endorsement may be issued if the property is not residential property or if the mortgagor-owner is a corporation, limited liability company, or partnership.

 

ALTA Zoning Endorsement 3

Endorsement Attached To And Made A Part
Of Policy Of Title Insurance
Serial Number __________
Issued By

Stewart Title Guaranty Company

Herein Called The Company

Order No.:

The Company insures the insured against loss or damage sustained by reason of any incorrectness in the assurance that, at Date of Policy:

  1. According to applicable zoning ordinances and amendments thereto, the land is classified Zone __________.

  2. The following use or uses are allowed under that classification subject to compliance with any conditions, restrictions, or requirements contained in the zoning ordinances and amendments thereto, including but not limited to the securing of necessary consents or authorizations as a prerequisite to the use or uses:

There shall be no liability under this endorsement based on the invalidity of the ordinances and amendments thereto until after a final decree of a court of competent jurisdiction adjudicating the invalidity, the effect of which is to prohibit the use or uses.

Loss or damage as to the matters insured against by this endorsement shall not include loss or damage sustained or incurred by reason of the refusal of any person to purchase, lease or lend money on the estate or interest covered by this policy.

This endorsement is made a part of the policy and is subject to all of the terms and provisions thereof and of any prior endorsements thereto. Except to the extent expressly stated, it neither modifies any of the terms and provisions of the policy and any prior endorsements, nor does it extend the effective date of the policy and any prior endorsements, nor does it increase the face amount thereof.

Signed under seal for the Company, but this endorsement is to be valid only when it bears an authorized countersignature.

Explanation

This endorsement to the Loan or Owner's Policy provides insurance of the applicable zoning classification and authorized use of the land. It is designed for issuance on unimproved property.

Underwriting Requirements

(1) We generally prefer an attorney's opinion (paid by the borrower) by counsel competent in zoning matters. The counsel should consider issues such as the date on which the zoning classification was enacted; prior zoning classification if a recent change has occurred; the propriety of procedure (such as notice to adjoining owners, and publication) in enactment of the zoning ordinance, particularly if the zoning ordinance was recently enacted; whether a variance was granted for the particular proposed use; whether the time allowed by law and regulation to contest the zoning enactment has passed; and whether notice of enactment was given to the public as required by law.

(2) With underwriter approval, we may rely upon a certification from the applicable zoning department or agency as to the zoning classification and authorized use together with a review of the zoning maps by the title insurance agent in some cases.

(3) You should verify that the allowed use is not based upon an exception, variance, or authorized nonconforming use. If such allowed use exists, consult with our underwriting personnel.

(4) We prefer that this endorsement refer, in the second paragraph, to the "following use or uses" by excerpting language from the zoning ordinance and not by stating the proposed use.

(5) If possible, request that the survey, if any, certify the zoning classification.

 

ALTA Zoning-Completed Structure Endorsement 3.1

Endorsement Attached To And Made A Part
Of Policy Of Title Insurance
Serial Number __________
Issued By

Stewart Title Guaranty Company

Herein Called The Company

Order No.:

  1. The Company insures the insured against loss or damage sustained by reason of any incorrectness in the assurance that, at Date of Policy:

    (a) According to applicable zoning ordinances and amendments thereto, the land is classified Zone __________.

  2. (b) The following use or uses are allowed under that classification subject to compliance with any conditions, restrictions, or requirements contained in the zoning ordinances and amendments thereto, including but not limited to the securing of necessary consents or authorizations as a prerequisite to the use or uses:

  3. The Company further insures against loss or damage arising from a final decree of a court of competent jurisdiction

    (a) prohibiting the use of the land, with any structure presently located thereon, as specified in paragraph 1(b); or

    (b) requiring the removal or alteration of the structure on the basis that, at Date of Policy, the ordinances and amendments thereto have been violated with respect to any of the following matters:

(i) Area, width or depth of the land as a building site for the structure;

(ii) Floor space area of the structure;

(iii) Setback of the structure from the property lines of the land; or

(iv) Height of the structure.

There shall be no liability under this endorsement based on the invalidity of the ordinances and amendments thereto until after a final decree of a court of competent jurisdiction adjudicating the invalidity, the effect of which is to prohibit the use or uses.

Loss or damage as to the matters insured against by this endorsement shall not include loss or damage sustained or incurred by reason of the refusal of any person to purchase, lease or lend money on the estate or interest covered by this policy.

This endorsement is made a part of the policy and is subject to all of the terms and provisions thereof and of any prior endorsements thereto. Except to the extent expressly stated, it neither modifies any of the terms and provisions of the policy and any prior endorsements, nor does it extend the effective date of the policy and any prior endorsements, nor does it increase the face amount thereof.

Signed under seal for the Company, but this endorsement is to be valid only when it bears an authorized countersignature.

Explanation

This endorsement to the Loan or Owner's Policy is designed for issuance on improved property.

Underwriting Requirements

(1) We require a review of the certificate of occupancy if the improvements were recently constructed.

(2) We require certification from the applicable zoning department or agency as to the zoning classification and authorized uses and as to compliance of existing improvements with applicable zoning ordinances. If the improvements were recently constructed, we then also require the title insurance agent to review the zoning maps.

(3) You should verify that the actual use is not based upon a variance, non-conforming use, or exception. If such allowed use exists, consult with our underwriting personnel.

(4) We may require an attorney's opinion (paid by the borrower) by counsel competent in zoning matters.

(5) We prefer that this endorsement refer, in the second paragraph, to the "following use or uses" by excepting language from the zoning ordinance and not by stating the use.

(6) If possible, request that the survey, if any, certify the zoning classification and compliance with applicable zoning ordinances.

(7) If you are requested to insure compliance with parking requirements, consult with our underwriting personnel. We prefer (i) a certification from the zoning authority as to compliance with parking requirements, (ii) that the survey state the number of parking spaces and certify compliance, and (iii) that you review the zoning ordinance to confirm compliance. Then we may agree to add "number of parking spaces" or "required parking".

 

ALTA Condominium Endorsement 4

Endorsement Attached To And Made A Part
Of Policy Of Title Insurance
Serial Number __________
Issued By

Stewart Title Guaranty Company

Herein Called The Company

Order No.:

The Company insures the insured against loss or damage sustained by reason of:

  1. The failure of the unit identified in Schedule A and its common elements to be part of a condominium within the meaning of the condominium statutes of the jurisdiction in which the unit and its common elements are located.

  2. The failure of the documents required by the condominium statutes to comply with the requirements of the statutes to the extent that such failure affects the title to the unit and its common elements.

  3. Present violations of any restrictive covenants which restrict the use of the unit and its common elements and which are contained in the condominium documents, except violations relating to environmental protection unless a notice of a violation thereof has been recorded or filed in the public records and is not excepted in Schedule B. The restrictive covenants do not contain any provisions which will cause a forfeiture or reversion of title.

  4. The priority of any lien for charges and assessments at Date of Policy provided for in the condominium statutes and condominium documents over the lien of any insured mortgage identified in Schedule A.

  5. The failure of the unit and its common elements to be entitled by law to be assessed for real property taxes as a separate parcel.

  6. Any obligation to remove any improvements which exist at Date of Policy because of any present encroachments or because of any future unintentional encroachment of the common elements upon any unit or of any unit upon the common elements or another unit.

  7. The failure of title by reason of a right of first refusal to purchase the unit and its common elements which was exercised or could have been exercised at Date of Policy

This endorsement is made a part of the policy and is subject to all of the terms and provisions thereof and of any prior endorsements thereto. Except to the extent expressly stated, it neither modifies any of the terms and provisions of the policy and any prior endorsements, nor does it extend the effective date of the policy and any prior endorsements, nor does it increase the face amount thereof.

Signed under seal for the Company, but this endorsement is to be valid only when it bears an authorized countersignature.

Explanation

This endorsement to the Loan Policy insures that the condominium project was created in accordance with state law, that there are no maintenance liens or forfeiture provisions with priority over the lien of the insured mortgage, and that there can be no exercise of a right of first refusal in connection with the current or prior transactions. The endorsement may be attached to the Owner's Policy.

Underwriting Requirements

(1) The initial examiner of the condominium must verify that the condominium declaration complies with all statutory requirements and that any conditions to creation of the condominium (such as record evidence of completion in some states) have been met.

(2) All taxes for years prior to the time that the units are entitled to separate assessment must be paid.

(3) The restrictions disclosed by the examination must not contain any forfeiture or reversionary provision (unless they are, by their express terms, subordinate to the lien of the insured mortgage).

(4) If the declaration creates a lien for maintenance assessments, all assessments outstanding for the period of time prior to closing must be paid and the declaration must state that the assessment lien is subordinate to the lien of the insured mortgage. In the states of Alabama, Alaska, Colorado, Connecticut, District of Columbia, Florida, Massachusetts, Minnesota, Nevada, Oregon, Pennsylvania, Rhode Island, Washington, and West Virginia state law provides that certain condominium assessments have priority over first mortgages. In those states, do not issue the ALTA Endorsement 4 on first mortgages unless you delete paragraph 4 or unless you add an exception pursuant to our local underwriting guidelines; otherwise, you should issue the ALTA 4.1 endorsement in those states or you should secure specific underwriter approval. In many states, assessment liens are superior to all mortgages except first mortgages. In all states issue only the ALTA 4.1 endorsement on Loan policies covering subordinate mortgages unless you secure Underwriter approval to issue the ALTA 4 endorsement.

(5) If the declaration creates a right of first refusal, you must verify with the association that the right is waived or ineffective as to the current and prior transactions.

(6) If the condominium creates commercial condominium units, then you must verify that any prior restrictions do not prohibit use for commercial purposes; otherwise, you must delete the first sentence of paragraph 3.

(7) Do not issue this endorsement if you know of any significant encroachment or boundary conflicts.

 

ALTA Condominium Endorsement 4.1

Endorsement Attached To And Made A Part
Of Policy Of Title Insurance
Serial Number __________
Issued By

Stewart Title Guaranty Company

Herein Called The Company

Order No.:

The Company insures the insured against loss or damage sustained by reason of :

  1. The failure of the unit identified in Schedule A and its common elements to be part of a condominium within the meaning of the condominium statutes of the jurisdiction in which the unit and its common elements are located.

  2. The failure of the documents required by the condominium statutes to comply with the requirements of the statutes to the extent that such failure affects the title to the unit and its common elements.

  3. Present violations of any restrictive covenants which restrict the use of the unit and its common elements and which are contained in the condominium documents, except violations relating to environmental protection unless a notice of a violation thereof has been recorded or filed in the public records and is not excepted in Schedule B. The restrictive covenants do not contain any provisions which will cause a forfeiture or reversion of title.

  4. Any charges or assessments provided for in the condominium statutes and condominium documents due and unpaid at Date of Policy.

  5. The failure of the unit and its common elements to be entitled by law to be assessed for real property taxes as a separate parcel.

  6. Any obligation to remove any improvements which exist at Date of Policy because of any present encroachments or because of any future unintentional encroachment of the common elements upon any unit or of any unit upon the common elements or another unit.

  7. The failure of title by reason of a right of first refusal to purchase the unit and its common elements which was exercised or could have been exercised at Date of Policy.

This endorsement is made a part of the policy and is subject to all of the terms and provisions thereof and of any prior endorsements thereto. Except to the extent expressly stated, it neither modifies any of the terms and provisions of the policy and any prior endorsements, nor does it extend the effective date of the policy and any prior endorsements, nor does it increase the face amount thereof.

Signed under seal for the Company, but this endorsement is to be valid only when it bears an authorized countersignature.

Explanation

This endorsement to the Loan policy insures that the condominium project was created in accordance with state law, that there are no forfeiture provisions with priority over the lien of the insured mortgage, that assessments are paid current, and that there can be no exercise of a right of first refusal in connection with the current or prior transactions. The endorsement may be attached to the Owner's Policy. If you are requested to issue a condominium endorsement on a second or subordinate mortgage, issue the ALTA 4.1 endorsement unless you secure underwriter approval to issue the ALTA 4 endorsement. If you are requested to issue a condominium endorsement on first mortgages in Alabama, Alaska, Colorado, Connecticut, District of Columbia, Florida, Massachusetts, Minnesota, Nevada, Oregon, Pennsylvania, Rhode Island, Washington or West Virginia, issue only the 4.1 endorsement (and do not issue the ALTA 4 endorsement) unless you delete paragraph 4 of the ALTA 4 endorsement, or unless you add an exception pursuant to our local underwriting guidelines, or unless you secure underwriter approval.

Underwriting Requirements

(1) The initial examiner of the condominium must verify that the condominium declaration complies with all statutory requirements and that any conditions to creation of the condominium (such as record evidence of completion in some states) have been met.

(2) All taxes for years prior to the time that the units are entitled to separate assessment must be paid.

(3) The restrictions disclosed by the examination must not contain any forfeiture or reversionary provision (unless they are, by their express terms, subordinate to the lien of the insured mortgage).

(4) All assessments outstanding for the period of time prior to closing must be paid.

(5) If the declaration creates a right of first refusal, you must verify with the association that the right is waived or ineffective as to the current and prior transactions.

(6) If the condominium creates commercial condominium units, then you must verify that any prior restrictions do not prohibit use for commercial purposes; otherwise, you must delete the first sentence of paragraph 3.

(7) Do not issue this endorsement if you know of any significant encroachment or boundary conflicts.

 

ALTA Planned Unit Development Endorsement 5

Endorsement Attached To And Made A Part
Of Policy Of Title Insurance
Serial Number __________
Issued By

Stewart Title Guaranty Company

Herein Called The Company

The Company insures the Insured against loss or damage sustained by reason of:

  1. Present violations of any restrictive covenants referred to in Schedule B which restrict the use of the land, except violations relating to environmental protection unless a notice of a violation thereof has been recorded or filed in the public records and is not excepted in Schedule B. The restrictive covenants do not contain any provisions which will cause a forfeiture or reversion of title.

  2. The priority of any lien for charges and assessments at Date of Policy in favor of any association of homeowners which are provided for in any document referred to in Schedule B over the lien of any insured mortgage identified in Schedule A.

  3. The enforced removal of any existing structure on the land (other than a boundary wall or fence) because it encroaches onto adjoining land or onto any easements.

  4. The failure of title by reason of a right of first refusal to purchase the land which was exercised or could have been exercised at Date of Policy.

This endorsement is made a part of the policy and is subject to all of the terms and provisions thereof and of any prior endorsements thereto. Except to the extent expressly stated, it neither modifies any of the terms and provisions of the policy and any prior endorsements, nor does it extend the effective date of the policy and any prior endorsements, nor does it increase the face amount thereof.

Signed under seal for the Company, but this endorsement is to be valid only when it bears an authorized countersignature.

Explanation

This endorsement is issued in conjunction with Loan Policies. It covers planned unit developments which may include "de minimus" PUD's. A Planned Unit Development will consist of a fee simple interest in a townhouse, patio home or single-family residence together with an appurtenant easement over common elements or together with an undivided interest as co-tenant in common elements. The endorsement may be attached to the Owner's Policy.

Underwriting Requirements

(1) The examination must not reflect that the present development violates outstanding prior restrictions. For example, sometimes older restrictions prohibit more than one residence on a platted lot and the townhouse development violates such restrictions by multi-unit development.

(2) The restrictions may not contain forfeiture or reversionary provisions (unless expressly subordinate to the insured mortgage).

(3) Any maintenance assessment secured by a lien in the restrictions and due prior to the Date of Policy must be paid.

(4) If the restrictions provide for a maintenance assessment lien, then the declaration must state that the assessment lien is subordinate to the lien of the insured mortgage. Otherwise, you must issue the ALTA Form 5.1 endorsement (which does not insure priority) otherwise;

(5) If the state has enacted a common interest ownership act (which provides that assessments for six months will attain priority over a previous mortgage), issue the ALTA 5.1 endorsement. Those states include Alaska, Colorado, Connecticut, Minnesota, Nevada, and West Virginia.

(6) Do not issue this endorsement if you know of any significant encroachments or boundary conflicts.

(7) If the restrictions provide for a right of first refusal, then you must verify with the association that the right may not be exercised in connection with the current or prior transactions.

 

ALTA Planned Unit Development Endorsement 5.1

Endorsement Attached To And Made A Part
Of Policy Of Title Insurance
Serial Number __________
Issued By

Stewart Title Guaranty Company

Herein Called The Company

Order No.:

The Company insures the insured against loss or damage sustained by reason of:

  1. Present violations of any restrictive covenants referred to in Schedule B which restrict the use of the land, except violations relating to environmental protection unless a notice of a violation thereof has been recorded or filed in the public records and is not excepted in Schedule B. The restrictive covenants do not contain any provisions which will cause a forfeiture or reversion of title.

  2. Any charges or assessments in favor of any association of homeowners which are provided for in any document referred to in Schedule B due and unpaid at Date of Policy.

  3. The enforced removal of any existing structure on the land (other than a boundary wall or fence) because it encroaches onto adjoining land or onto any easements.

  4. The failure of title by reason of a right of first refusal to purchase the land which was exercised or could have been exercised at Date of Policy.

This endorsement is made a part of the policy and is subject to all of the terms and provisions thereof and of any prior endorsements thereto. Except to the extent expressly stated, it neither modifies any of the terms and provisions of the policy and any prior endorsements, nor does it extend the effective date of the policy and any prior endorsements, nor does it increase the face amount thereof.

Signed under seal for the Company, but this endorsement is to be valid only when it bears an authorized countersignature.

Explanation

This endorsement is issued in conjunction with Loan Policies. It covers planned unit developments which may include "de minimus" PUD's. A planned unit development will consist of a fee simple interest in a townhouse, patio home or single-family residence together with an appurtenant easement over common elements or together with an undivided interest as co-tenant in common elements. The endorsement may be attached to the Owner's Policy. This endorsement does not insure the priority of an assessment lien over the mortgage. You must issue this endorsement in states which have adopted a Uniform Common Ownership Act.

Underwriting Requirements

(1) The examination must not reflect that the actual present development violates outstanding prior restrictions. For example, sometimes older restrictions prohibit more than one residence on a platted lot and the townhouse development violates such restrictions by multi-unit development.

(2) The restrictions may not contain forfeiture or reversionary provisions (unless expressly subordinate to the insured mortgage).

(3) Any maintenance assessment secured by a lien in the restrictions and due prior to the Date of Policy must be paid.

(4) If the state has enacted a common interest ownership act (which provides that assessments for six months will attain priority over a previous mortgage), you must issue the ALTA 5.1 endorsement. Those states include Alaska, Colorado, Connecticut, Minnesota, Nevada, and West Virginia.

(5) If the restrictions provide for a maintenance assessment lien and the declaration does not expressly subordinate the assessment lien to the insured mortgage, you must issue the ALTA 5.1 endorsement.

(6) Do not issue this endorsement if you know of any significant encroachments or boundary conflicts.

(7) If the restrictions provide for a right of first refusal, then you must verify with the association that the right may not be exercised in connection with the current or prior transactions.

 

ALTA Variable Rate Mortgage Endorsement 6

Endorsement Attached To And Made A Part
Of Policy Of Title Insurance
Serial Number __________
Issued By

Stewart Title Guaranty Company

Herein Called The Company

Order No.:

The Company insures the owner of the indebtedness secured by the insured mortgage against loss or damage sustained by reason of:

  1. The invalidity or unenforceability of the lien of the insured mortgage resulting from the provisions therein which provide for changes in the rate of interest.

  2. Loss of priority of the lien of the insured mortgage as security for the unpaid principal balance of the loan, together with interest as changed in accordance with the provisions of the insured mortgage, which loss of priority is caused by the changes in the rate of interest.

    "Changes in the rate of interest", as used in this endorsement, shall mean only those changes in the rate of interest calculated pursuant to the formula provided in the insured mortgage at Date of Policy.

This endorsement does not insure against loss or damage based upon (a) usury, or (b) any consumer credit protection or truth in lending law.

This endorsement is made a part of the policy and is subject to all of the terms and provisions thereof and of any prior endorsements thereto, except that the insurance afforded by this endorsement is not subject to Section 3(d) of the Exclusions from Coverage. Except to the extent expressly stated, it neither modifies any of the terms and provisions of the policy and any prior endorsements, nor does it extend the effective date of the policy and any prior endorsements, nor does it increase the face amount thereof.

Signed under seal for the Company, but this endorsement is to be valid only when it bears an authorized countersignature.

Explanation

Each of these endorsements insures against invalidity, unenforceability or loss of priority of the lien of the insured mortgage by reason of provisions for changes in the rate of interest. Form 6.1 authorizes exception to statutes or regulations concerning variable rate loans, but is generally not issued. Form 6.2 insures against invalidity, loss of priority or unenforceability of the lien of the insured mortgage by reason of interest on interest or the addition of unpaid interest to the principal balance. None of the endorsements increase the face amount of the Policy. Each endorsement excludes usury, consumer credit protection, and Truth-in-Lending laws.

Underwriting Requirements

(1) On residential transactions, the endorsement may be issued in conjunction with the Loan Policy so long as the mortgage or mortgage rider refers to the variable rate features of the interest rate and, where applicable, to the negative amortization provisions. The interest rate should be determined by an objective formula not within the control of the lender (e.g., its own "prime rate"). If negative amortization is provided, we generally require that the mortgage state the maximum amount of amortization possible. Do not issue the Form 6.2 without underwriter consent if the lender receives appreciation, contingent interest or a portion of cash flow. Any applicable state law limiting the effectiveness of such features on commercial transactions must be analyzed.

(2) We prefer to issue the ALTA Form 6 endorsement instead of the Form 6.1. You should offer to issue the ALTA 6 when requested to issue the ALTA 6.1. When issuing Form 6.1 endorsement on residential property, except to 12 U.S.C. 3801 et seq.. In addition, you should except to any applicable state law limiting the effectiveness of variable rate mortgage provisions.

 

ALTA Variable Rate Mortgage-Regulations Endorsement 6.1

Endorsement
Attached To Policy No.______
Issued By

Stewart Title Guaranty Company

The Company insures the owner of the indebtedness secured by the insured mortgage against loss or damage sustained by reason of:

  1. The invalidity or unenforceability of the lien of the insured mortgage resulting from the provisions therein which provide for changes in the rate of interest.

  2. Loss of priority of the lien of the insured mortgage as security for the unpaid principal balance of the loan, together with interest as changed in accordance with the provisions of the insured mortgage, which loss of priority is caused by the changes in the rate of interest.

    "Changes in the rate of interest," as used in this endorsement, shall mean only those changes in the rate of interest calculated pursuant to the formula provided in the insured mortgage at Date of Policy.

This endorsement does not insure against loss or damage by reason of the failure of the insured to comply with the following statutes or regulations concerning variable rate mortgages:

This endorsement does not insure against loss or damage based upon (a) usury, or (b) any consumer credit protection or truth in lending law.

This endorsement is made a part of the policy and is subject to all of the terms and provisions thereof and of any prior endorsements thereto, except that the insurance afforded by this endorsement is not subject to Section 3(d) of the Exclusions From Coverage. Except to the extent expressly stated, it neither modifies any of the terms and provisions of the policy and any prior endorsements, nor does it extend the effective date of the policy and any prior endorsements, nor does it increase the face amount thereof.

[Witness clause optional]

Explanation

Each of these endorsements insures against invalidity, unenforceability or loss of priority of the lien of the insured mortgage by reason of provisions for changes in the rate of interest. Form 6.1 authorizes exception to statutes or regulations concerning variable rate loans, but is generally not issued. Form 6.2 insures against invalidity, loss of priority or unenforceability of the lien of the insured mortgage by reason of interest on interest or the addition of unpaid interest to the principal balance. None of the endorsements increase the face amount of the Policy. Each endorsement excludes usury, consumer credit protection, and Truth-in-Lending laws.

Underwriting Requirements

(1) On residential transactions, the endorsement may be issued in conjunction with the Loan Policy so long as the mortgage or mortgage rider refers to the variable rate features of the interest rate and, where applicable, to the negative amortization provisions. The interest rate should be determined by an objective formula not within the control of the lender (e.g., its own "prime rate"). If negative amortization is provided, we generally require that the mortgage state the maximum amount of amortization possible. Do not issue the Form 6.2 without underwriter consent if the lender receives appreciation, contingent interest or a portion of cash flow. Any applicable state law limiting the effectiveness of such features on commercial transactions must be analyzed.

(2) We prefer to issue the ALTA Form 6 endorsement instead of the Form 6.1. You should offer to issue the ALTA 6 when requested to issue the ALTA 6.1. When issuing Form 6.1 endorsement on residential property, except to 12 U.S.C. 3801 et seq.. In addition, you should except to any applicable state law limiting the effectiveness of variable rate mortgage provisions.

 

ALTA Variable Rate Mortgage-Negative Amortization Endorsement 6.2

Endorsement
Attached To Policy No.______
Issued By

Stewart Title Guaranty Company

The Company insures the owner of the indebtedness secured by the insured mortgage against loss or damage sustained by reason of:

  1. The invalidity or unenforceability of the lien of the insured mortgage resulting from the provisions therein which provide for: (a) interest on interest; (b) changes in the rate of interest; or (c) the addition of unpaid interest to the principal balance of the loan.

  2. Loss of priority of the lien of the insured mortgage as security for the principal balance of the loan, including any unpaid interest which was added to principal in accordance with the provisions of the insured mortgage, interest on interest, or interest as changed in accordance with the provisions of the insured mortgage, which loss of priority is caused by (a) changes in the rate of interest; (b) interest on interest; or (c) increases in the unpaid principal balance of the loan resulting from the addition of unpaid interest.

    "Changes in the rate of interest," as used in this endorsement, shall mean only those changes in the rate of interest calculated pursuant to the formula provided in the insured mortgage at Date of Policy.

This endorsement does not insure against loss or damage based upon (a) usury, or (b) any consumer credit protection or truth-in-lending law.

This endorsement is made a part of the policy and is subject to all of the terms and provisions thereof and of any prior endorsements thereto, except that the insurance afforded by this endorsement is subject to neither Section 3(d) of the Exclusions From Coverage nor Section 8(d) of the Conditions and Stipulations. Except to the extent expressly stated, it neither modifies any of the terms and provisions of the policy and any prior endorsements, nor does it extend the effective date of the policy and any prior endorsements, nor does it increase the face amount thereof.

[Witness clause optional]

Explanation

Each of these endorsements insures against invalidity, unenforceability or loss of priority of the lien of the insured mortgage by reason of provisions for changes in the rate of interest. Form 6.1 authorizes exception to statutes or regulations concerning variable rate loans, but is generally not issued. Form 6.2 insures against invalidity, loss of priority or unenforceability of the lien of the insured mortgage by reason of interest on interest or the addition of unpaid interest to the principal balance. None of the endorsements increase the face amount of the Policy. Each endorsement excludes usury, consumer credit protection, and Truth-in-Lending laws.

Underwriting Requirements

(1) On residential transactions, the endorsement may be issued in conjunction with the Loan Policy so long as the mortgage or mortgage rider refers to the variable rate features of the interest rate and, where applicable, to the negative amortization provisions. The interest rate should be determined by an objective formula not within the control of the lender (e.g., its own "prime rate"). If negative amortization is provided, we generally require that the mortgage state the maximum amount of amortization possible. Do not issue the Form 6.2 without underwriter consent if the lender receives appreciation, contingent interest or a portion of cash flow. Any applicable state law limiting the effectiveness of such features on commercial transactions must be analyzed.

(2) We prefer to issue the ALTA Form 6 endorsement instead of the Form 6.1. You should offer to issue the ALTA 6 when requested to issue the ALTA 6.1. When issuing Form 6.1 endorsement on residential property, except to 12 U.S.C. 3801 et seq.. In addition, you should except to any applicable state law limiting the effectiveness of variable rate mortgage provisions.

 

ALTA Manufactured Housing Unit Endorsement 7

Endorsement
Attached To Policy No.______
Issued By

Stewart Title Guaranty Company

The term "land" as defined in this policy includes the manufactured housing unit located on the land at Date of Policy.

This endorsement is made a part of the policy and is subject to all of the terms and provisions thereof and of any prior endorsements thereto. Except to the extent expressly stated, it neither modifies any of the terms and provisions of the policy and any prior endorsements, nor does it extend the effective date of the policy and any prior endorsements, nor does it increase the face amount thereof.

[Witness clause optional]

Explanation

This endorsement is issued in conjunction with either a Loan or Owner's Policy to insure manufactured housing unit located on the land. Manufactured housing includes pre-fab homes, mobile homes, modular homes, and other manufactured housing permanently attached to the land as a fixture.

Underwriting Requirements

(1) You must verify that the manufactured housing is attached to the property as a permanent improvement; for example, you may verify by inspection, affidavit and survey, or affidavit and pictures.

(2) You must verify that the manufactured housing is not treated under state law as personal property; for example, you must verify that any title certificate previously issued has been canceled.

(3) You must verify that any liens on the title certificate are satisfied and that any sales or personal property taxes on the transfer of the manufactured housing are paid.

(4) If state law provides that a separate UCC filing may be effective as to a third-party purchaser, then you must review the applicable UCC records in connection with the manufactured housing unit.

(5) Even if you are not asked to issue this endorsement, you should, whenever insuring land with manufactured housing attached as a permanent improvement, verify that there are no liens on the title (either on the title certificate if applicable or as reflected by a UCC search) or you should make a general exception to any such possible liens.

(6) You must verify that the assessor has assessed the manufactured home as a real property improvement.

 

ALTA Environmental Protection Lien Endorsement 8.1

Endorsement
Attached To Policy No. ______
Issued By

Stewart Title Guaranty Company

The insurance afforded by this Endorsement is only effective if the land is used or is to be used primarily for residential purposes.

The Company insures the insured against loss or damage sustained by reason of lack of priority of the lien of the insured mortgage over:

(a) any environmental protection lien which, at Date of Policy, is recorded in those public records established under state statutes at Date of Policy for the purpose of imparting constructive notice of matters relating to real property to purchasers for value and without knowledge, or filed in the records of the clerk of the United States district court for the district in which the land is located, except as set forth in Schedule B; or

(b) any environmental protection lien provided for by any state statute in effect at Date of Policy, except environmental protection liens provided for by the following state statutes:

(Add statutes if pursuant to underwriting requirements)

For the purposes of this paragraph (b), a statute shall be deemed a "state statute" only insofar as it provides for an environmental protection lien arising or created by reason of matters other than those listed under "Excluded Matters" below.

Excluded Matters

(i) plant diseases, pests, or rodents;

(ii) water drainage or flood control, mining reclamation, weed abatement, or unfit buildings (where the applicable statutory provisions do not expressly relate to pollution or to hazardous or toxic wastes or substances);

(iii) snow or ice removal; or

(iv) charges, taxes or assessments authorized by any state statute to be imposed by local political subdivisions or districts of the state (except where such charges, taxes or assessments, by express provisions of the applicable statute, relate to pollution or to hazardous or toxic wastes or substances).

This Endorsement is made a part of the Policy and is subject to all of the terms and provisions thereof and of any prior endorsements thereto. Except to the extent expressly stated, it neither modifies any of the terms and provisions of the Policy and any prior endorsements, nor does it extend the Effective Date of the Policy and any prior endorsements, nor does it increase the face amount thereof.

[Witness clause optional]

Explanation

This endorsement is only issued in conjunction with a Loan Policy covering primarily residential property.

Paragraph (a) insures that there are no environmental protection liens filed in the public records which have priority over the lien of the insured mortgage unless excepted in Schedule B.

Paragraph (b) insures that there are no state statutes which provide that liens filed after the Date of Policy would have priority over the lien of the insured mortgage, except for those specifically excepted under paragraph (b).

Underwriting Requirements

(1) This endorsement may be issued only on property which is improved, zoned, restricted, or under construction for, residential purposes.

(2) You are required only to review your local records for liens filed. You are not required to check the federal district court clerk's office.

(3) Because some states have not enacted the Uniform Federal Lien Registration Act or similar legislation, Stewart Title Guaranty Company may periodically mail to you liens filed by the EPA. You should consider these liens in the examination of the title.

(4) Our endorsement contains excluded matters agreed to by Fannie Mae. Therefore, it is not necessary to except to various state statutes. Our forms either state "No Exception" or contain one of the following additional exceptions:

(a) Connecticut - Conn. Gen. Stat. §22a-452a (may be deleted if the land is exclusively residential real estate);

(b) Georgia - Ga. Code Ann. §12-13-12;

(c) Iowa - Iowa Code Ann. §455B.396;

(d) Kentucky - Ky. Rev. St. Ann. §224.877;

(e) Louisiana - La. Rev. Stat. Ann. §13:2575 (applicable only to municipalities of 90,000 or more) and §30:2281;

(f) Maine - Me. Rev. Stat. Ann. tit. 38 §1371 (may be deleted if the land is primarily used or under construction as single or multi-family housing);

(g) Maryland - Md. Environ. Code Ann. §7-266;

(h) Massachusetts - Mass. Gen. Laws Ann. ch. 21E §13 (may be deleted if greater part of land devoted to single or multi-family housing);

(I) Michigan - Mich. Comp. Laws §§29.16, 299.543, 299.616a, 299.842 and 323.10;

(j) Minnesota - Minn. Stat. Ann. §§400.16, 400.161, 514.67;

(k) New Hampshire - N.H. Rev. Stat. Ann. §§147-B:2, 147-B:10. (This exception should be added unless land is improved or under construction solely as residential property);

(l) New Jersey - "This Endorsement will not insure against liens recorded pursuant to the Spill Compensation Control Act, N.J.S.A. §58:10-23.11 et seq. subsequent to the issuance of this Policy";

(m) Ohio - Ohio Rev. Code Ann. §§3734.122, 3734.20, and 3734.22 (applicable only if not a single family residence; may be deleted if improved single family residence);

(n) South Carolina - S.C. Code Ann. §48-1-350;

(o) Texas - Tex. Health & Safety Code §§361.194, 342.007, 343.023(a),(c), and (d); Texas Local Gov't. Code §214.0015(b), (d), and (e); and Tex. Rev. Civ. Stat. Ann. Art. 1175 §10(b), (d), and (e) (parallel statutory provisions; Tex. Rev. Civ. Stat. Ann. art. 5920-11 §9(a), if applicable.

 

ALTA Environmental Protection Lien Endorsement A 8.1

Endorsement
Attached To Policy No.______
Issued By

Stewart Title Guaranty Company

The insurance afforded by this endorsement is only effective if the land is used or is to be used primarily for residential purposes.

The Company insures the insured against loss or damage sustained by reason of lack of priority of the lien of the insured mortgage over:

(a) any environmental protection lien which, at Date of Policy, is recorded in those records established under state statutes at Date of Policy for the purpose of imparting constructive notice of matters relating to real property to purchasers for value and without knowledge, or filed in the records of the clerk of the United States district court for the district in which the land is located, except as set forth in Schedule B; or

(b) any environmental protection lien provided for by any state statute in effect at Date of Policy, except environmental protection liens provided for by the following state statutes:

This endorsement is made a part of the policy and is subject to all of the terms and provisions thereof and of any prior endorsements thereto. Except to the extent expressly stated, it neither modifies any of the terms and provisions of the policy and any prior endorsements, nor does it extend the effective date of the policy and any prior endorsements, nor does it increase the face amount thereof.

[Witness clause optional]

No Guidelines available for this endorsement

 

ALTA Restrictions, Encroachments, Minerals Endorsement 9

Endorsement
Attached To Policy No.______
Issued By

Stewart Title Guaranty Company

The Company insures the owner of the indebtedness secured by the insured mortgage against loss or damage sustained by reason of:

  1. Any incorrectness in the assurance that, at Date of Policy:

    (a) There are no covenants, conditions or restrictions under which the lien of the mortgage referred to in Schedule A can be divested, subordinated or extinguished, or its validity, priority or enforceability impaired.

    (b) Unless expressly excepted in Schedule B:

    (1) There are no present violations on the land of any enforceable covenants, conditions or restrictions, nor do any existing improvements on the land violate any building setback lines shown on a plat of subdivision recorded or filed in the public records.

    (2) Any instrument referred to in Schedule B as containing covenants, conditions or restrictions on the land does not, in addition, (i) establish an easement on the land; (ii) provide a lien for liquidated damages; (iii) provide for a private charge or assessment; (iv) provide for an option to purchase, a right of first refusal or the prior approval of a future purchaser or occupant.

    (3) There is no encroachment of existing improvements located on the land onto adjoining land, nor any encroachment onto the land of existing improvements located on adjoining land.

    (4) There is no encroachment of existing improvements located on the land onto that portion of the land subject to any easement excepted in Schedule B.

    (5) There are no notices of violation of covenants, conditions and restrictions relating to environmental protection recorded or filed in the public records.

  2. Any future violation on the land of any existing covenants, conditions or restrictions occurring prior to the acquisition of title to the estate or interest in the land by the insured, provided the violation results in:

    (a) invalidity, loss of priority, or unenforceability of the lien of the insured mortgage; or

    (b) loss of title to the estate or interest in the land if the insured shall acquire title in satisfaction of the indebtedness secured by the insured mortgage

  3. Damage to existing improvements, including lawns, shrubbery or trees:

    (a) which are located on or encroach upon that portion of the land subject to any easement excepted in Schedule B, which damage results from the exercise of the right to maintain the easement for the purpose for which it was granted or reserved;

    (b) resulting from the future exercise of any right to use the surface of the land for the extraction or development of minerals excepted from the description of the land or excepted in Schedule B.

  4. Any final court order or judgment requiring the removal from any land adjoining the land of any encroachment excepted in Schedule B.

  5. Any final court order or judgment denying the right to maintain any existing improvements on the land because of any violation of covenants, conditions or restrictions or building setback lines shown on a plat of subdivision recorded or filed in the public records.

Wherever in this endorsement the words "covenants, conditions or