ALTA 11-06 Mortgage Modification Endorsement

This endorsement may be used by itself only to insure a modification that: (i) extends the time for repayment; (ii) decreases the interest rate, provided that, if the rate is variable, the cap is not greater the original the original fixed rate; (iii) extends the term; (iv) releases a portion of the secured property; or (v) provides a correction to perfect the lien or comply with the terms of the lender’s original commitment. Since the foregoing modifications under the insurance regulations do not require a premium, there is no premium due for this endorsement.

As to all modifications other than the above, the ALTA 11-06 Mortgage Modification Endorsement cannot be issued unless a separate simultaneous endorsement is issued which: (i) amends the loan policy to update its effective date; (ii) changes the amount of the coverage to the current principal balance; and (ii) amends the exceptions on Schedule B to reflect all matters affecting title since the original or previously amended effective date of the policy. The separate endorsement is required because the ALTA 11-06 Mortgage Modification Endorsement by its printed terms does not change the effective date or amount of the policy. Since, under the insurance regulations, a mortgage modification premium must be paid on the simultaneous endorsement updating  the policy, there is no separate premium due for the ALTA 11-06 Mortgage Modification Endorsement.

This endorsement provides TWO (2) affirmative coverages as follows:

       • Paragraph 1 insures against the invalidity or unenforceability of the lien of the insured mortgage as modified by the Mortgage Modification Agreement being insured.

       • Paragraph 2 insures against lack of priority of the lien of the insured mortgage as of the date of the endorsement over defects in or liens or encumbrances on title except as to those liens, encumbrances or other matters added as exceptions in the blank space provided at the end of the paragraph.

If the ALTA 11-06 Mortgage Modification Endorsement is issued by itself, Paragraph 2 of the endorsement requires that all liens, encumbrances and other matters affecting title recorded after the original or previously amended effective date of the policy must be listed as exceptions in the blank space provided for such purpose at the end of said Paragraph 2. If the ALTA 11-06 Mortgage Modification Endorsement is issued in conjunction with a simultaneous endorsement updating the effective date of the policy and setting forth all matters affecting title since the original or previously amended effective date of the policy, insert the phrase “those defects, liens or encumbrances, if any, set forth on the endorsement updating the policy issued simultaneously with this endorsement” in the blank space at the end of Paragraph 2 of the ALTA 11-06 Mortgage Modification Endorsement.

EXCLUSIONS FROM COVERAGE: This endorsement does not insure against loss or damage (including costs, attorney’s fees or expenses) by reason of any claim that arose out of the transaction creating the modification under federal bankruptcy, state insolvency, or similar creditor’s rights laws based on the modification being deemed either: (i) a fraudulent conveyance or transfer; or (ii) a preferential transfer, except where the preferential transfer results from the failure to timely record the modification or such recordation fails to impart notice to a purchaser for value or to a judgment or lien creditor.

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