T-33.1 Guideline - TX Variable Rate Mortgage-Negative Amoritzation Endorsement

Explanation:

The Variable Rate Mortgage Endorsement (T-33) and the Variable Rate Mortgage ? Negative Amortization Endorsement (T-33.1) insure against invalidity, unenforceability or loss of priority of the lien of the insured mortgage by reason of provisions for changes in the rate of interest. Form T-33.1 also insures against invalidity, loss of priority or unenforceability of the lien of the insured mortgage by reason of interest on interest or the addition of unpaid interest to the principal balance. Neither of these endorsements increases the face amount of the Policy. Each endorsement excludes usury, consumer credit protection, and Truth-in-Lending laws.  Rate Rule R-11.D provides that the rate for these Endorsements is $20 each. Procedural Rule P-9(b)(6) authorizes issuance of these Endorsements to the Mortgagee Policy if the mortgage secures is a variable rate loan.  The Variable Rate Mortgage Endorsement (T-33) is the same as the American Land Title Association (ALTA) Endorsement 6, and the Variable Rate Mortgage ? Negative Amortization Endorsement (T-33.1) is the same as the ALTA Endorsement 6.2.

Underwriting Requirements:

On residential or commercial transactions, the Variable Rate Mortgage Endorsement (T-33) may be issued in conjunction with the Mortgagee Policy so long as the mortgage or mortgage rider refers to the variable rate features of the interest rate.   The Variable Rate Mortgage ? Negative Amortization Endorsement (T-33.1) may be issued if the mortgage or mortgage rider refers to the negative amortization provisions. Do not issue the Form T-33.1 on commercial transactions without underwriter consent if you know that the lender receives appreciation, contingent interest or a portion of cash flow.

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.