Guideline: ALTA Endorsement 29-06 and 29.1-06 (Interest Rate Swap Endorsement)

Explanation:

This endorsement insures against (1) invalidity or unenforceability of the insured mortgage as security for the repayment of the Swap Obligation; (2) lack of priority of the lien of the insured mortgage as security for the repayment of the Swap Obligation.

This endorsement contains exclusions from coverage: master interest rate exchange agreement, creditors' rights, calculation by court, unpaid recording or similar taxes. We have two Swap Obligation endorsements - one relating to Direct Obligation (29-06) and one relating to Additional Interest (29.1-06). Endorsements 29-06 and 29.1-06 are issued with a 2006 ALTA Loan Policy.

Underwriting Requirements:

We require the following:

1. Verify the mortgage expressly secures the Swap Obligation and complies with applicable state requirements for disclosure of Swap Obligations, if applicable.

2. Verify the swap obligation is evidenced by an existing master swap agreement and confirmation.

3. Verify the mortgage establishes a maximum amount of the Swap Obligation.

4. Secure approval of a Senior Underwriter.

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.