STG High Liability (Over $25 Million) Mechanic's Lien Coverage Approval Request

Name of Issuing Office: ____________________________________________

File No. ________________________

Contact Person: ___________________________________________

Phone Number for Contact Person: ____________________________

E-mail address for Contact Person: ____________________________

1. Premium. Please specify:

______(a) Total premium charge to customer for title insurance policies (excluding endorsements); ______(b) Amount of premium for title insurance policies (excluding endorsements) that will be remitted to Stewart Title Guaranty Company;

______(c) Total premium charge to customer for endorsements;

______(d) Amount of premium for endorsements that will be remitted to Stewart Title Guaranty Company;

______(e) Total Amount of premium for title insurance policies and endorsements that will be remitted to Stewart Title Guaranty Company;

______(f) $ per thousand premium charge to customer for title insurance policies and endorsements.

______(g) $ per thousand remitted to Stewart Title Guaranty Company for title insurance policies and endorsements.

2.  Project Description.  Please include/describe/attach:

(a) proposed improvements _________________________________________________

(b) has work commenced? ___________

(c) date of commencement or anticipated commencement _______________

(d) anticipated date of completion _________________

(e) is a copy of an appraisal attached? ______________

3.  Title Policies.  Please include/describe/attach:

(a) amount of policy(ies) requested, Loan: ______________; Owner’s ______________;

(b) attach copy of pro forma policy or commitment;

(c) attach proposed form of pending disbursement clause or endorsement to be used in the Loan Policy;

(d) attach proposed down date endorsement for Loan Policy; and

(e) verify that the Owner’s Policy will include a standard general mechanic’s lien exception.

4.  Contractor and subcontractors.  Please include/describe/attach:

(a) budget or summary of budget;

(b) names of original contractor(s);

(c) improvements, supplies, and materials to be provided by each original contractor;

(d) contract price for each original contractor;

(e) amount paid to date to original contractor and amount remaining to be paid for work already performed;

(f) date of expected completion by original contractor; and

(g) list of all major first tier subcontractors, if any.

5.  Sources and uses of funds.  Please include/describe/attach:

(a) equity to be provided by owner or investors, and describe procedure, amount, and timing for contribution or investment;

(b) if equity is to be contributed into an account, provide the applicable account agreement and a schedule showing the timing and amount of the equity contributions; and

(c) construction loan funding by lender, and describe procedure, amount, and timing for disbursement.

6.  Background and history.  Please include/describe/attach:

Background and experience (including suits and known mechanic’s lien claims) of:

(a) owner (or family) and their principals, how long they have engaged in the applicable business, and their track record on prior transaction;

(b) each original contractor;

(c) STG history with owner (or family of companies) (including past policies we have issued to lenders); and

(d) whether the owner and/or principals are privately owned or publicly traded.

7.  Financial statements.  Please include/describe/attach:

(a) Financial statements of owner/borrower and indemnitor, if different, and each original contractor, as available;

(b) Were these financial statements reviewed by our staff, and, if so, by whom and what were our staff comments, if any?

(c) Are they audited financial statements?

(d) Are they current?

8.  Indemnity(ies).  Please include/describe/attach:

(a) Review and attach form of indemnity;

(b) Names and roles (e.g., general contractor, owner, etc.) of parties who will execute indemnity(ies);

(c) Will STG Work Affidavit and Indemnity Agreement form (on VU) be used?

(d) Will STG Indemnity Against Mechanics Liens form (on VU) be used?

(e) What requested modifications were made to STG indemnity forms, if any.  Please provide redlined copy;

(f) Does the indemnity include a subordination of rights/claims by the indemnitor?

(g) Does the original contractor subordinate its claims to the Insured Mortgage?

(h) List known outstanding indemnities by owner and indemnitor, if different, and original contractor.

9.  Lender’s disbursement procedures.  Please include/describe/attach:

(a) frequency of disbursements;

(b) approximate amount of each disbursement;

(c) parties (e.g., original contractor and/or subcontractors) who will be paid directly by lender or lender’s disbursing agent or other party disbursing;

(d) party who will be disbursing; and

(e) documents that will be required by lender or other party before disbursement (e.g. form of lien waiver);

10.  Title company’s procedures at disbursement.  Please include/describe/attach:

(a) effective date of coverage (e.g. date of disbursement, date of invoices/waivers);

(b) gap, if any, between effective date of coverage and date of invoices/waivers;

(c) waivers that will be obtained (and any limitations on enforcement under state law) and attach copies of the forms;

(d) subordinations that will be obtained (and any limitations on enforcement under state law) and attach copies of the forms;

(e) process for review and verification of waivers, review of title, procedure to determine that claimants are paid;

(f) procedure to determine whether work has commenced at recording and whether any bills are outstanding at closing and, if so, whether bills will be paid current to date of closing, and

(g) procedure and timing for issuance of down date endorsement, and whether endorsement will be issued prior to current disbursement, and, if issued prior to current disbursement, what conditions, if any, will be placed in the down date endorsement conditioning the coverage on that disbursement.

11.  Exposure that will exist for the proposed coverage on the Loan Policy. Please include/describe/attach:

(a) analysis of subcontractors and contractors who will not be paid through date of conditional waivers;

(b) gap between date of conditional waivers and date of down date endorsement; and

(c) estimate of the dollar amount of exposure (for bills not paid through date of coverage) for each down date endorsement.

12.  Other/additional credit enhancements.  Please include/describe/attach:

(a) parent indemnity, third party guaranty, advance equity deposit, Letter of Credit, bonds (e.g. payment and/or performance), escrow or other means for mitigating risk.

 Date: ______________________

Prepared by:_________________________ (same as Contact Person, above)

Note: Mechanic’s lien coverage for this transaction must be approved by the Senior Underwriting Committee – consisting of any three of the following persons: President, Chief Legal Officer, Chairman of the Board, General Counsel, Chief Underwriting Counsel, and an SLS Senior Underwriter. Please forward your request for Senior Underwriter approval to Jim Gosdin, John Killea, and Lynne Demarest.


Mechanic’s Lien Coverage Approved:

_______________________                    _______________

Senior Underwriter                                     Date

_______________________                    _______________

SLS Senior Underwriter                                Date

_______________________                    _______________

Chief Underwriting Counsel                          Date

_______________________                    _______________

General Counsel                                         Date

_______________________                    _______________

Chairman of the Board                                 Date

_______________________                    _______________

Chief Legal Officer                                        Date

_______________________                    _______________

President                                                     Date


No guidelines are available for this form at this time.