2006 ALTA Endorsements

1
2006 ALTA Endorsements

• Roger Therien
• Regional Counsel West Region
• 11/28/2006

2
Topics Covered

• All endorsements will be listed (See
  westregion.com)
• Certain ones will be discussed
• New Endorsements
• Modified Endorsements
• Confusing endorsements that deserve to be
  discussed

3
Regular v. -06

• 45 ALTA endorsements.
• Includes as of 6/17/06 8 new, 3 modified.
• Parallel set of 45 endorsements designated -06.
• The -06 endorsements match the 2006 policies.
• Both sets of endorsements are substantively
  identical.
• Additionally, the JR1 and JR2 endorsements are
  for the Limited Coverage Residential Loan Policy.

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New and Modified Endorsements

• 7.1 Manufactured Housing UnitConversion Loan
• 7.2 Manufactured Housing UnitConversion Owner
• 9 Restrictions, Encroachments MineralsLOAN
• 9.1 Restrictions, Encroachments,
  MineralsunimprovedOWNER
• 9.2 Restrictions, Encroachments,
  MineralsimprovedOWNER
• 9.3 Restrictions, Encroach., MineralsLOANFuture
  ImpMineral
• Extraction
• 9.4 Restrictions, Encroach., MineralsunimprovedO
  WNERFuture
• ImpMineral Extraction
• 9.5 Restrictions, Encroach., MineralsimprovedOWN
  ERFuture
• ImpMineral Extraction
• 14.3 Future Advance Reverse Mortgage
• 22 Location
• 22.1 Location and Map

5
Street Assessments

• Lien of assessments for street improvements under
  construction or completed at Date of Policy not
  excepted in Schedule B.
• 2006 Loan Policy
• 11. The lack of priority of the lien of the
  Insured Mortgage upon the Title . . . (b) over
  the lien of any assessments for street
  improvements under construction or completed at
  Date of Policy.

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2 Truth in Lending

• Any final judgment . . . that . . . 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 . .
  .
• Basically, guidelines allow issuance only when
  lender does not need it because TILA clearly does
  not apply (borrower is an entity or loan is for
  business purposes).

7
3 Zoning Unimproved Land

• The Company insures the Insured against loss or
  damage sustained in the event that, at Date of
  Policy
• 1. According to applicable zoning ordinances and
  amendments thereto, the land is not classified
  Zone __________.
• 2. The following use or uses are not allowed
  under that classification _____________

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3.1 Zoning Improved Land

• Same as 3, plus
• Insurance against violations as to type of
  structures, land area, floor space, setbacks,
  height of structures, number of parking spaces.

9
4 and 4.1 Condominium

• Numerous coverages insuring that condo is validly
  created and in compliance with CCRs.
• 4 Insures against priority of any lien for
  charges and assessments over the lien of the
  insured mortgage.
• 4.1 Insures against priority of the lien for
  charges and assessments due and unpaid at Date of
  Policy.

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4 and 4.1 Condominium (Cont.)

• Why the difference?
• NV Revised Statutes 116.3116 The homeowner
  associations lien is also prior to a first
  security interest on the unit recorded before the
  date on which the assessment became delinquent
  to the extent of the assessments that became
  due during the 6 months immediately preceding
  institution of an action to enforce the lien.

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4 and 4.1 Condominium (Cont.)

• HI Revised Statutes 514A-90 (g) . . . An
  association . . . may specially assess the amount
  of the unpaid regular monthly common assessments
  . . . against a person who, in a judicial or
  nonjudicial . . . foreclosure, purchases a
  delinquent apartment . . .
• (h) The amount of the special assessment assessed
  under subsection (g) shall not exceed the total
  amount of unpaid regular monthly common
  assessments that were assessed during the six
  months immediately preceding the completion of
  the . . . foreclosure. In no event shall the
  amount of the special assessment exceed the sum
  of 1,800.

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4 and 4.1 Condominium (Cont.)

• So . . .
• In HI and NV, do not issue the 4, which insures
  against the priority of any lien for assessments.
• In those states, issue the 4.1, which only
  insures against the priority of assessments that
  are due and unpaid at Date of Policy.

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5 and 5.1 Planned Unit Devel.

• Exact same language as in the 4 and 4.1.
• So . . .
• In HI and NV, do not issue the 5, which insures
  against the priority of any lien for assessments.
• In those states, issue the 5.1, which only
  insures against the priority of assessments that
  are due and unpaid at Date of Policy.

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6 Series Variable Rate

• 6 Variable Rate
• 6.1 Variable Rate, Regulation NO LONGER USED.
• 6.2 Variable Rate, Negative Amortization
• I think 6.1 was eliminated because it contained
  an unworkable exception The 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 __
• All have an exception for usury, consumer credit
  protection and truth in lending laws.

15
7 Series Manufactured Housing

• 7 Manufactured Housing Unit
• Land includes manufactured housing unit
• 7.1 MHU Conversion Loan
• 7.2 MHU Conversion Owner
• The 7.1 and 7.2 provide the same coverage as the
  7, plus enhanced coverages relating to
  conversion, including specific insurance that the
  MHU is real property.

16
8.1 Environmental Lien

• No change.

17
Revised Comprehensive Forms

• The Comprehensive Forms
• ALTA Restrictions, Encroachments, and Mineral
  Endorsement
• 9 for Loan Enhanced version 9.3
• 9.1 for Owner Unimproved Enhanced version 9.4
• 9.2 for Owner Improved Enhanced version 9.5

• As used in paragraphs 1.a. and 5, the words
  covenants, conditions or restrictions do not
  include any covenants, conditions or restrictions
  Delete relating to environmental protection.
  (a) relating to obligations of any type to
  perform maintenance, repair or remediation on the
  Land, or (b) 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 or filed in the Public
  Records at Date of Policy and is not excepted in
  Schedule B.

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NEW Comprehensive Forms 9.3

• 9 v. 9.3 (Loan)
• Coverage for damage from exercise of right of
  surface entry
• 9 Damage to existing improvements . . .
• 9.3 Damage to improvements located on the Land
  on or after Date of Policy . . .
• BOTH including lawns, shrubbery, or trees

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NEW Comprehensive Forms 9.4

• 9.1 v. 9.4 (Owner Unimproved)
• Coverage for damage from exercise of right of
  surface entry
• 9.1 Damage to buildings . . . constructed after
  Date of Policy
• 9.4 Damage to improvements . . . constructed
  after Date of Policy (excluding lawn, shrubbery,
  or trees)

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NEW Comprehensive Forms 9.5

• 9.2 v. 9.5 (Owner Improved)
• Coverage for damage from exercise of right of
  surface entry
• 9.2 Damage to existing buildings . . .
• 9.5 Damage to improvements located on the Land
  on or after Date of Policy . . . (excluding
  lawns, shrubbery, or trees)

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10 13

• 10 Assignment of Mortgage
• 10.1 Assignment of Mortgage (with priority
  coverage date down)
• 11 Modification of Mortgage
• 12 Aggregation (Tie-In)
• 13 Leasehold Owner
• 13.1 Leasehold Loan

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14 Series

• 14 Future Advance Priority
• 14.1 Future Advance Knowledge
• 14.2 Future Advance Letter of Credit
• 14.3 Future Advance Reverse Mortgage
• Quite a bit of demand for this kind of endorsement

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15 - 17

• 15 Nonimputation Full Equity Transfer
• 15.1 Nonimputation Additional Insured
• 15.2 Nonimputation Partial Equity Transfer
• 16 Mezzanine Financing
• 17 Access and Entry
• 17.1 Indirect Access and Entry

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18 - 21

• 18 Single Tax Parcel
• 18.1 Multiple Tax Parcel
• 19 Contiguity Multiple Parcels
• 19.1 Contiguity Single Parcel
• 20 First Loss Multiple Parcel Transactions
• 21 Creditors Rights

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22 Series

• 22 Location
• Insures that an improvement with a specified
  address is located on the Land
• 22.1 Location and Map
• 22 coverage plus the attached map, if any, shows
  location and dimensions of land according to the
  Public Records.
• Identical to CLTA 116

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Short Form Lim. Cov. Jr. Loan Policy

• JR1 Supplemental Coverage (Date Down)
• JR2 Revolving Credit / Variable Rate
• No -06 versions because there is no 2006
  version of this policy.