Bulletin: AZ2012001

Date:
August 31, 2012
To:
All Arizona Issuing Offices
RE:
New Forms Approved

Dear Associates: 

The Arizona Title Insurance Rating Bureau has approved the following ALTA forms for use in Arizona, effective immediately. Attached also is the latest rate manual.

 ALTA Homeowner's Policy of Title Insurance (02/03/10)

The ALTA Homeowner's Policy of Title Insurance (02/03/10) is designed to incorporate the changes of the 2006 Owner's Policy and improve the title insurance coverage given to the insured. The only changes in the 2010 Policy include:  

The expansion of the Continuation of Coverage provision by adding provision b.5 to the policy.

The inclusion of a creditor's rights exclusion (no.7) that is consistent with the Covered Risks.

The new definition for Estate Planning Entity was added to the definition section.

ALTA Expanded Coverage Residential Loan Policy For a One-To-Four Family Residence (7/26/10) and ALTA Short Form Expanded Coverage Residential Loan Policy (7/26/10)

The ALTA Expanded Coverage Residential Loan Policy For a One-To Four Family Residence (7/26/10) is designed to incorporate the changes of the 2006 Loan Policy and improve the title insurance coverage given to the insured. The only changes in the policy include: 

The inclusion of a creditor's rights exclusion (no. 9) that is consistent with the Covered Risks.

The change in Section 8(a) (iii) language to be more consistent to the existing ALTA Loan Policy of 6/17/06.

Endorsements

The American Land Title Association adopted new versions of existing ALTA endorsements that were designed for issuance with the new 2006 ALTA Owner and 2006 ALTA Loan Policy which were adopted as of June 17, 2006, and approved in Arizona. While the changes were not necessarily substantive, they were designed to aid in understanding and interpreting the 2006 policies.

These new versions of the ALTA Endorsements include ALTA endorsements: 3.1-06, 4-06, 5-06, 10-06, 10.1-06, 13-06, 13.1-06, 14-06, 14.1-06, 14.2- 06, 14.3-06 and 28-06. The risks covered pertain to Zoning-Completed Structure, Condominiums, PUD's, Assignments, Leasehold, Future Advances and Easement-Damage issues, some or all of which may be present in a given transaction. These new versions are being filed at the same rate as the existing ALTA endorsements.

The American Land Title Association also adopted for use some new endorsements as of October 22, 2009, February 3, 2010, July 26, 2010, February 3, 2011 and August 1, 2011, which are to be used in connection with the 2006 policies already in use. These endorsements have been designed to follow the same concepts as the 2006 ALTA Policies in that they were formulated and designed to be more logically organized and precise in wording. The format of these new forms should aid in their understanding and interpretation as they have been written to clarify terms and reorganize the content of the language for easier understanding by the consumer.

These newly adopted endorsements are: ALTA Endorsement 11.1-06; ALTA 29-06, ALTA 29.1-06, ALTA 29.2-06; ALTA 29.3-06; ALTA 30-06, ALTA 31-06, ALTA 32-06, ALTA 32.1-06, ALTA 33-06 and ALTA 34-06. 

ALTA Endorsement 11.1-06 Mortgage Modification with Subordination
This endorsement is designed for issuance when an intervening lien is subordinated by agreement to the insured mortgage in connection with the modification of the insured mortgage.  This form is similar to the ALTA Endorsement 11-06 which is already available in Arizona. The charge for this endorsement shall be the same rate as the ALTA 11-06 provided for in the manual provisions.

ALTA Endorsement 29-06 Interest Rate Swap Endorsement - Direct Obligation
This new endorsement insures the validity, priority, and enforceability of the lien of the Insured Mortgage as security for the repayment of the Swap Obligation. This endorsement will only be issued for commercial transactions.  The charge for this endorsement is 10% of the basic schedule of charges with a minimum of $100.00 when issued with the policy or a minimum or $200.00 if issued after the date of the policy.

ALTA Endorsement 29.1-06 Interest Rate Swap Endorsement - Additional Interest
This new endorsement insures the validity, priority, and enforceability of the lien of the Insured Mortgage as security for the repayment of the Swap Obligation that is considered additional interest. This endorsement will only be issued for commercial transactions.  The charge for this endorsement is 10% of the basic schedule of charges with a minimum of $100.00 when issued with the policy or a minimum or $200.00 if issued after the date of the policy. 

ALTA Endorsement 29.2-06 Interest Rate Swap Endorsement - Direct Obligation-Defined Amount
This endorsement insures against loss or damage, not to exceed the Additional Amount of Insurance, by reason of the invalidity, unenforceability or lack of priority of the lien of the Insured Mortgage as security for the repayment of the Swap Obligation at the Date of the Endorsement. This endorsement will be used for commercial transactions. The charge for this endorsement shall be based on the applicable increase in liability for the additional amount of insurance set forth in the endorsement form based upon the basic schedule of charges set out in our manual.

ALTA Endorsement 29.3-06 Interest Rate Swap Endorsement - Additional Interest-Defined Amount
This endorsement insures against loss or damage, not to exceed the Additional Amount of Insurance, by reason of the invalidity, unenforceability or lack of priority of the lien of the Insured Mortgage as security for the repayment of the Additional Interest at Date of Endorsement. This endorsement will be used for commercial transactions. The charge for this endorsement shall be based on the applicable increase in liability for the additional amount of insurance set forth in the endorsement form based upon the basic schedule of charges set out in our manual.

ALTA Endorsement 30-06 One To Four Family Shared Appreciation Mortgage
This new endorsement may be used in connection with loan workouts or other finance transactions where the mortgage could secure payment of a portion of the appreciation in value of the land.  The endorsement is designed for issuance on mortgages covering one-to-four family residences.  The charge for this endorsement is $50.00.

ALTA Endorsement 31-06 Severable Improvements
This new endorsement insures against covered losses with respect to property affixed to the land that does not constitute real property.  The endorsement applies to commercial properties and insures not only specified loss resulting in the reduction in value of the insured’s interest in any severable improvements but also stated cost actually incurred in connection with the removal of any severable improvement.  The charge for this endorsement is 10% of the basic schedule of charges with a minimum of $100.00. 

ALTA Endorsement 32-06 Construction Loan-Loss of Priority
This new endorsement provides stated insurance with respect to the validity or priority of the lien of the insured mortgage as security for each construction loan advance made on or before the date of coverage. The charge for this endorsement is 10% of the basic schedule of charges with a minimum of $100.00.

ALTA Endorsement 32.1-06 Construction Loan-Loss of Priority-Direct Payment
This new endorsement provides stated insurance with respect to the validity or priority of the lien of the insured mortgage as security for each construction loan advance made on or before the date of coverage. The charge for this endorsement is 10% of the basic schedule of charges with a minimum of $100.00.

ALTA Endorsement 33-06 Disbursement
This new endorsement provides for a change to the date of coverage, but not the date of policy. This endorsement does not serve to change the dates on any endorsements and/or extended coverage.  The charge for this endorsement is $50 for residential and $100 for commercial property.

ALTA Endorsement 34-06 Identified Risk Coverage
This endorsement insures against loss or damage sustained by the Insured by reason of: (a.) A final order or decree enforcing the Identified Risk in favor of an adverse party; or (b.) The release of a prospective purchaser or lessee of the Title or lender on the Title from the obligation to purchase, lease, or lend as a result of the Identified Risk, but only if (i.) there is a contractual condition requiring the delivery of marketable title, and (ii.) neither the Company nor any other title insurance company is willing to insure over the Identified Risk with the same conditions as in this endorsement.  The charge for this endorsement is $50.00.

If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.

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THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER  AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.