Guideline: ALTA Endorsement 14 and 14-06 (Future Advance-Priority) W and WO/MML

Explanation:

This endorsement insures against (1) invalidity or unenforceability of the insured mortgage as security for Advances; (2) lack of priority of the lien of the insured mortgage as security for Advances; and (3) invalidity or unenforceability of the mortgage because of Re-Advances and repayments, lack of outstanding debt before an Advance, and failure to comply with legal requirements for Advances; (4) invalidity or unenforceability of the insured mortgage because of adjustment of interest or addition of interest to principal, and (5) loss of priority of the insured mortgage caused by adjustment of interest rates and addition of interest to principal. 

This endorsement contains exclusions from coverage (similar to those in ALTA Endorsement 14.1):  advances after a bankruptcy, real estate taxes and assessments, federal tax liens filed more than 45 days before the advance, federal or state environmental protection liens, and usury or consumer credit protection or truth in lending law.  

We have two versions of the endorsement - one which contains mechanic's lien exception (Endorsement 14 W/MML at paragraph 4.f) and the other which does not contain the mechanic's lien exception (Endorsement 14 WO/MML). 

This endorsement is designed for insurance of priority of Advances, regardless of whether the lender knows of the intervening liens and other matters.   It is designed for issuance in those states in which Advances will have priority based upon state law according priority to any Advances.   It also may be issued in other states if the Advances are obligatory under the loan agreement.  It may be issued on commercial or residential transactions.

Endorsement 14 is issued with a 1992 ALTA Loan Policy.  Endorsement 14-06 is issued with a 2006 ALTA Loan Policy.

Underwriting Requirements:

We require the following:

1. Verify the mortgage expressly secures future Advances and complies with applicable state requirements for disclosure of future Advances in Virtual Underwriter under 17.46.12 "Future Advance Forms to Use for Each State".

2. Verify the mortgage establishes a maximum time for Advances.

3. Verify the mortgage establishes a maximum amount of Advances.

4. Comply with our underwriting instructions for the applicable state set forth in Virtual Underwriter under 17.46 "Revolving Credit (Future Advance) Endorsements" and under 17.46.12 "Future Advance Forms to Use for Each State".

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.