NY TIRSA Variable Rate Mortgage-Negative Amortization Endorsement Guideline 6.2
Explanation:Purpose Of Endorsement:
This endorsement insures the lender against invalidity, unenforceability or loss of priority of the lien of the insured mortgage, based on the provisions providing for changes of interest rate and/or negative amortization, exclusive of usury or consumer credit protection or truth-in-lending laws, provided the mortgagee adheres to the formula contained in the mortgage.
Underwriting Requirements:Requirements For Issuance:
(1) The mortgage to be insured must contain provisions referring to
(a) the variable rate nature of the loan obligation,
(b) the index used for interest rate adjustments,
(c) a provision for negative amortization (adding accrued but unpaid interest to principal, or “capitalization” of interest), and
(d) a cap or ceiling on the amount of negative amortization.
(2) The mortgage must be insured for the maximum amount of principal, including any negative amortization amounts (see TIRSA Rate Manual, Part 1, §6).
Issued With The Following Policies:
This endorsement is available for applicable mortgage policies only.
The underwriting guidelines contained herein have been provided for general reference. The facts, circumstances, and location of the subject property should be considered when determining the issuance of the requested form or endorsement. Please note that all of the forms and endorsements included in this system may not be available in all states. Accordingly, please contact the appropriate Stewart Title Guaranty Company underwriting personnel in order to determine availability.
Compliance with the underwriting guidelines contained herein in no way obligates Stewart Title Guaranty Company to issue any form or endorsement.
This guideline applies to the following form(s):None