Archives

The minimum premium for this endorsement is $25.00.

This endorsement is to be issued only on loan policies insuring either residential or non- residential properties; therefore, the endorsement may not be issued in connection with Owner’s Policies. This endorsement provides affirmative coverage as follows:

Insures against lack of priority of the lien of the insured mortgage over any environmental lien recorded at the date of the policy unless such lien is set forth in Schedule B.

At this time Florida Statutes do not provide for either a “super priority lien” as to environmental matters or any other form of lien unless notice of the lien or of the environmental violation is recorded in the Public Records. Accordingly, this endorsement may be given provided the title search reveals no such recorded notice of lien or environmental violation.

The minimum premium for this endorsement is $25.00.

This endorsement may be used for either an Owner’s Policy or Loan Policy. The endorsement is necessary in those cases in which the Policy includes not only the land but a manufactured housing unit (mobile home). Since by virtue of this endorsement the mobile home is being insured as part of the land, the deed and/or mortgage must specifically describe both the land and the mobile home by type and serial number and the necessary steps must be taken to make sure that the mobile home is taxed as real property. This will require the issuance of a “RP” tag which confirms that the mobile home is permanently affixed to the real property and taxed as realty.

It is also required that the Certificate of Title for the mobile home be obtained in the name of the insured owner and/or mortgagor in addition to being described in the deed and/or mortgage and any liens or encumbrances noted on the Certificate of Title must be satisfied in the same manner as mortgages and lien encumbering the title to the land.

It is strongly recommended that title to the mobile home be retired as part of the title transfer. 

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 and a payment which provides for a situation in which the amount of the monthly payment is not, or may not be, sufficient to cover the payment of interest on the loan and the shortage in interest is then added to the principal balance of the loan causing “negative amortization”.

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, interest on interest and negative amortization.

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, interest on interest and negative amortization.

CAUTION: This endorsement may only be given if the recorded mortgage or its rider specifically provides for the changes in interest rate, interest on interest and the formula for calculating such changes in interest rate and specifically provides for negative amortization (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, interest on interest and the formula for calculating such changes in interest rate and specifically provide for negative amortization, the endorsement may not be given.

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.

The minimum premium for this endorsement is $25.00.

This Endorsement may be used with either an Owner’s Policy or Loan Policy and contains FOUR (4) forms of affirmative coverage, as follows:

1) Paragraph 1 insures against existing violations of any restrictive covenants referred to in Schedule B that restrict the use of the land and that such restrictive covenants do not contain any provisions which will cause a forfeiture or reversion of title. The term “restrictive covenants” as used in this affirmative coverage does not include any covenant, condition or restriction (i) relating to obligations of any type to perform maintenance, repair or remediation on the land, or (ii) pertaining to environmental protection of any kind or nature , including hazardous or toxic matters, conditions or substances, except to the extent that a notice of a violation or alleged
violation affecting the land has been recorded in the public records at the date of the policy and is not excepted in Schedule B. Therefore, if the survey reflects any violation of the restrictive covenants, underwriting approval is required in accordance with the underwriting guidelines applicable to: (i) if the endorsement is being issued on an Owner’s Policy, the guidelines regarding encroachments and setback violations under the ALTA 9.2-06 Endorsement; or (ii) if the endorsement is being issued on a Loan Policy, the guidelines regarding encroachments and setback violations under the ALTA 9-06 Endorsement.

2) Paragraph 2 insures that there are no unpaid charges or assessments due and owing to any association as of the date of the policy. Therefore, an estoppel letter from each association having assessment rights against the land confirming that all assessments are paid in full is required to provide this affirmative coverage.

3) Paragraph 3 insures against the forced removal of any existing structure existing on the land at the date of the policy (other than a boundary wall or fence) because it encroaches onto adjoining land or onto any easements. Therefore, if the survey reflects an encroachment of any structure onto adjoining land, underwriting approval is required in accordance with the underwriting guidelines
applicable to: (i) if the endorsement is being issued on an Owner’s Policy, the guidelines regarding encroachments onto adjoining land under the ALTA 9.2-06 Endorsement; or (ii) if the endorsement is being issued on a Loan Policy, the guidelines regarding encroachments onto adjoining land under the ALTA 9- 06 Endorsement.

4) Paragraph 4 insures against the failure of title resulting from a right of first refusal to purchase the land which was exercised or could have been exercised at the date of policy. Therefore, if the restrictive covenants require consent by an association to the purchase of the land or a right of first refusal, evidence of compliance with such requirement must be obtained and recorded in order to insure title and provide this affirmative coverage.

The minimum premium for this endorsement is $25.00.

This endorsement may be given with respect to either or both an Owner’s Policy and/or Loan Policy and contains SEVEN (7) forms of affirmative coverage as follows:

1)Paragraph 1 insures that the insured unit together with its common elements is part of a validly created condominium pursuant to the Florida Condominium Act. Therefore, if the Condominium has been validly created and the unit and its common elements properly described, this affirmative coverage may be given.

2)Paragraph 2 insures that the condominium documents comply with the requirements of the Florida Condominium Act to the extent necessary to convey valid title to the insured unit. Therefore, an error in the documents creating the condominium does not prevent providing this affirmative coverage unless such error adversely affects title to the insured unit.

3)Paragraph 3 insures against existing violations of restrictive covenants in the condominium documents which restrict the use of the insured unit and its common elements and that such restrictive covenants do not contain any provisions which will cause a forfeiture or reversion of title. The term “restrictive covenants” as used in this affirmative coverage does not include any covenant, condition or restriction (i) relating to obligations of any type to perform maintenance, repair or remediation on the insured unit or its common elements, or (ii) pertaining to environmental protection of any kind or nature, including hazardous or toxic matters, conditions or substances, except to the extent that a notice of a violation or alleged violation affecting the insured unit or its common elements has been recorded in the public records at the date of the policy and is not excepted in Schedule B. As a result of this coverage, it is recommended to confirm with the condominium association that there are no present violations of the restrictions as part of the required confirmation that all assessments are paid in full.

4)Paragraph 4 insures that there are no unpaid condominium assessments as of the date of the policy. Therefore, an estoppel letter from the condominium association confirming that all assessments are paid in full is required to provide this affirmative coverage.

5)Paragraph 5 insures that the insured unit and its common elements are separately assessed for real property taxes. In Florida, once the condominium has been validly created, real property taxes are statutorily assessed as a separate parcel and, therefore, this affirmative coverage may be given.

6)Paragraph 6 insures against the obligation to remove any improvements existing at the date of the policy because of present encroachments. Therefore, if the survey contained in the Declaration of Condominium, as amended by any amendments, reflects that any condominium improvements encroach upon an easement, underwriting approval should be obtained prior to providing this affirmative coverage.

7)Paragraph 7 insures against the failure of title resulting from a right of first refusal to purchase the insured unit which was exercised or could have been exercised at the date of policy. Therefore, if the Declaration of Condominium requires consent to the purchase of the insured unit or a right of first refusal, evidence of compliance with such requirement must be obtained and recorded in order to insure title and provide this affirmative coverage.

The premium for this endorsement is ten percent (10%) of the premium for the loan policy at the promulgated risk rate with a minimum charge of $25.00 and a maximum charge of $100.00.

This endorsement contains the following affirmative coverage:

Insures against a final judgment or court order that either the lien of the insured mortgage has been terminated or title of the insured acquired through foreclosure or deed in lieu of foreclosure has been defeated as a result of a valid exercise of the right of rescission under the Federal Truth in Lending Act.

This endorsement may only be used with respect to “commercial purpose loans” as defined under the Federal Truth in Lending Act thus exempting the loan from the right of rescission requirements under said Federal Truth in Lending Act. This is a factor which is totally “out of the arena” of issues normally determined by an examination of title and its insurability but rather goes directly to the nature of the loan.

Requests for this endorsement are very rare; however, when received, they generally involve the case in which a borrower is giving a mortgage on the individual’s primary residence to secure a loan for “commercial purposes” (e.g. loan on an individual’s primary residence, the proceeds of which will be used to finance the purchase of inventory for the individual’s business) and the lender wants affirmative coverage that the right of rescission under the Federal Truth in Lending Act does not apply.

If this endorsement is requested, underwriting approval should be obtained, since the issues to be determined in the providing of such coverage are, as indicated, beyond the normal scope of title examination and insurability issues.