The minimum premium for this endorsement is $25.00.
This endorsement is used to insure mortgages which secure notes which contain a variable rate of interest.
The endorsement provides TWO (2) forms of affirmative coverage as follows:
1) Paragraph 1 insures the validity or enforceability of the lien of the insured mortgage as a result of its provisions for changes in the rate of interest.
2) Paragraph 2 insures against any loss of the priority of the mortgage as a result of its provisions for changes in the rate of interest.
CAUTION: This endorsement may only be given if the recorded mortgage or its rider specifically provides for the changes in interest rate and the formula for calculating such changes in interest rate (all FANNIE MAE mortgages with the appropriate rider meets this requirement).
If this endorsement is requested for a commercial transaction and the mortgage or its rider does not provide for the changes in the interest rate and contain the formula for calculating such changes in interest rate, the endorsement may not be given.
