CLTA Obligatory Advance Endorsement Guideline 122.2
Explanation:This endorsement gives the same coverage to an ALTA construction lender as the CLTA 122 Endorsement except that the liability is increased by the amount of the advance.
Underwriting Requirements:(1) Since liability under this endorsement is limited to the amount of the policy, it should only be issued where the original ALTA policy was written for the full amount of the loan.
(2) Title personnel must require that the lender advise them in writing that an advance of a specified sum has been or is to be made to a named person or entity and that such sum is an advance made under the insured deed of trust or mortgage in accordance with the provisions calling for disbursements set forth in the construction loan agreement between the borrower and the lender.
(3) The endorsements to the construction loan policy must be consecutively numbered and the aggregate amount of the policy endorsement must not exceed the amount of the loan.
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):