Guideline: ALTA Endorsement 30-06 (Shared Appreciation Mortgage) (7-26-10)

Explanation:

This endorsement provides coverage for a shared appreciation mortgage. “Shared Appreciation” is defined to mean “increases in the Indebtedness secured by the Insured Mortgage by reason of shared equity or appreciation in the value of the Land.” A shared appreciation mortgage may be used in connection with loan workouts or other finance transactions. 

Subject to certain exclusions, this endorsement insures against loss or damage sustained by reason of: (a) the invalidity or unenforceability of the lien of the Insured Mortgage as security for the Indebtedness caused by the shared appreciation provisions in the Insured Mortgage; or (b) loss of priority of the lien of the Insured Mortgage as security for the Indebtedness caused by the shared appreciation provisions in the Insured Mortgage. 

This endorsement is available only for loan policies insuring mortgages that encumber a one-to-four family residential property.

Underwriting Requirements:

1. Confirm that the property to be insured is a one-to-four family residential property. 

2. Obtain and review a copy of the proposed mortgage. Confirm that the mortgage contains provisions for shared equity or appreciation in the value of the Land.

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):

ALTA Endorsement 30-06 (Shared Appreciation Mortgage) (7-26-10)