T-46 Guideline - Texas Residential Limited Coverage Junior Mortgagee Policy Additional Coverage Endorsement

Explanation:

TDI TEXAS RESIDENTIAL LIMITED COVERAGE JUNIOR MORTGAGEE POLICY DOWN DATE ENDORSEMENT (T-45) AND TEXAS RESIDENTIAL LIMITED COVERAGE JUNIOR MORTGAGE POLICY HOME EQUITY LINE OF CREDIT/VARIABLE RATE ENDORSEMENT (T-46) AND TEXAS RESIDENTIAL LIMITED COVERAGE JUNIOR MORTGAGEE POLICY ADDITIONAL COVERAGE ENDORSEMENT

The T-44 TEXAS RESIDENTIAL LIMITED COVERAGE JUNIOR MORTGAGEE POLICY is designed to provide lenders with information sufficient to allow the lender to make a home equity loan under Art. 16, Section 50a6 of the Texas Constitution.  Procedural Rule P-46 provides the basic guidelines for issuing this policy. 

This policy is designed to provide the proposed lender insured with information as to:

  • The grantee on the latest recorded document
  • Any Home Equity loans filed with the preceding 12 months
  • Other Home Equity loans filed more than 12 months before the policy date
  • Any other monetary lien affecting title and recorded in the public records subsequent to the latest document recorded in the public records purporting to vest title to the fee simple estate in the land.

 

Underwriting Requirements:

NOTE:  Stewart Title Guaranty Company specific guidelines/recommendations are shown below in bold italics

The T-3 endorsement may be used to insert certain matters into the T-44:

  • The following Insuring Provision is substituted for Insuring Provision number 4 of the Texas Residential Limited Coverage Junior Mortgagee Policy (T-44):

"4. Any other Monetary Lien affecting the title, recorded in the public records."

This provision is met by doing a complete down date of title after the home equity lien is recorded and determining that no other liens have been recorded.

  • The following is added to the Texas Residential Limited Coverage Junior Mortgagee Policy Combined Schedule:

"Tax Designation of Land:

[   ] is designated for agricultural use as provided by statutes governing property tax.

[   ] is not designated for agricultural use as provided by statutes governing property tax."

 

This provision is met by obtaining tax statements or certificates setting out the ag exemption status of the property.  Depending on the information one or more of the following steps may be taken:

  • The following Insuring Provisions are added to the Texas Residential Limited Coverage Junior Mortgagee Policy:

"5. At Date of Policy, the Tax Designation of Land shown on the Combined Schedule to this policy being incorrect."

"6. Any lien for standby fees, taxes or assessments of any taxing authority that are due and payable at Date of Policy."

The following exception is substituted for Exception A of the exceptions of the Texas Residential Limited Coverage Junior Mortgagee Policy Combined Schedule:

"A. Standby fees, taxes or assessments by any taxing authority for the year 20 __ and subsequent years, and subsequent taxes and assessments by any taxing authority for prior years.

A Company may incorporate or add the provisions of the Texas Residential Limited Coverage Junior Mortgagee Policy Additional Coverage Endorsement to the Texas Residential Limited Coverage Junior Mortgagee Policy (T-44) if such coverage is requested prior to the issuance of the Texas Residential Limited Coverage Junior Mortgagee Policy (T-44).

Texas Residential Limited Coverage Junior Mortgagee Policy Down Date Endorsements (T-45)

A Company may issue one or more Texas Residential Limited Coverage Junior Mortgagee Policy Down Date Endorsements (T-45) within one year after issuance by that Company of the Texas Residential Limited Coverage Junior Mortgagee Policy (T-44). A Company may not issue a Texas Residential Limited Coverage Junior Mortgagee Policy Down Date Endorsement (T-45) more than one year after issuance of the Texas Residential Limited Coverage Junior Mortgagee Policy (T-44).

A company may delete Paragraph B* from the Texas Residential Limited Coverage Junior Mortgagee Policy Down Date Endorsement (T-45) if that paragraph is not applicable at the time of the issuance of the Endorsement. *{Paragraph B reads as follows: B. Monetary liens and applicable recorded item(s) [Insert Item description(s) and recording information.]

(1)        Any Home Equity Mortgage affecting the title described in this Combined Schedule. (May be deleted if none described in this Combined Schedule)

(2)        [Describe Monetary Liens]}

If the amount of the extension of credit secured by the insured's mortgage exceeds the amount of insurance previously stated in the Texas Residential Limited Coverage Junior Mortgagee Policy (T-44), the amount of insurance shall be increased by noting that change as a Paragraph D in the Texas Residential Limited Coverage Junior Mortgagee Policy Down Date Endorsement (T-45), subject to payment of the applicable premium as provided in Rule R-27. The Paragraph D shall read as follows: "D. The amount of insurance of the Policy is hereby amended to be $_______________.

Texas Residential Limited Coverage Junior Mortgagee Policy Home Equity Line of Credit/Variable Rate Endorsement (T-46)

A Company may issue one Texas Residential Limited Coverage Junior Mortgagee Policy Home Equity Line of Credit/Variable Rate Endorsement (T-46) within one year after issuance by that Company of the Texas Residential Limited Coverage Junior Mortgagee Policy (T-44). A Company may not issue a Texas Residential Limited Coverage Junior Mortgagee Policy Home Equity Line of Credit/Variable Rate Endorsement (T-46) more than one year after issuance of the Texas Residential Limited Coverage Junior Mortgagee Policy (T-44).

The Texas Residential Limited Coverage Junior Mortgagee Policy Home Equity Line of Credit/Variable Rate Endorsement (T-46) shall not be issued unless the insured's mortgage described on the Texas Residential Limited Coverage Junior Mortgagee Policy Down Date Endorsement (T-45) secures a variable rate loan or home equity line of credit. For purposes of this rule, a variable rate loan is a loan made pursuant to Subsection (a)(6), of Section 50, Article XVI, Texas Constitution which permits adjustments of the interest rate, with such adjustments being implemented through changes in the payment amount and/or as otherwise allowed by applicable law. For purposes of this rule, a home equity line of credit is an open-end account made pursuant to Subsections (a)(6) and (t), of Section 50, Article XVI, Texas Constitution.

Procedures Applicable to Texas Residential Limited Coverage Junior Mortgagee Policy (T-44) and Texas Residential Limited Coverage Junior Mortgagee Policy Down Date Endorsement (T-45) and Texas Residential Limited Coverage Junior Mortgagee Policy Home Equity Line of Credit/Variable Rate Endorsement (T-46) and Texas Residential Limited Coverage Junior Mortgagee Policy Additional Coverage Endorsement

A Company may not issue a Commitment for Title Insurance prior to or in connection with the issuance of the Texas Residential Limited Coverage Junior Mortgagee Policy (T-44) or Texas Residential Limited Coverage Junior Mortgagee Policy Down Date Endorsement (T-45) or Texas Residential Limited Coverage Junior Mortgagee Policy Home Equity Line of Credit/Variable Rate Endorsement (T-46) or Texas Residential Limited Coverage Junior Mortgagee Policy Additional Coverage Endorsement.

No proforma or specimen Texas Residential Limited Coverage Junior Mortgagee Policy (T-44) Combined Schedule or Texas Residential Limited Coverage Junior Mortgagee Policy Down Date Endorsement (T-45) or Texas Residential Limited Coverage Junior Mortgagee Policy Home Equity Line of Credit/Variable Rate Endorsement (T-46) or Texas Residential Limited Coverage Junior Mortgagee Policy Additional Coverage Endorsement may be issued.

A T-3 Correction Endorsement may be issued to delete errors or erroneous exceptions contained in Paragraph 2 of the Texas Residential Limited Coverage Junior Mortgagee Policy (T-44) Combined Schedule or Paragraph A of the Texas Residential Limited Coverage Junior Mortgagee Policy Down Date Endorsement (T-45). The requirements of Section 2, Paragraph IV, of the Basic Manual, entitled "Correction of Policy or Binder" shall apply to a Correction Endorsement for a Texas Residential Limited Coverage Junior Mortgagee Policy (T-44) Combined Schedule or Texas Residential Limited Coverage Junior Mortgagee Policy Down Date Endorsement (T-45) or Texas Residential Limited Coverage Junior Mortgagee Policy Home Equity Line of Credit/Variable Rate Endorsement (T-46) or Texas Residential Limited Coverage Junior Mortgagee Policy Additional Coverage Endorsement.

The Company may not provide Express Insurance (pursuant to P-39), or coverage or endorsements applicable to a Mortgagee Title Policy of Title Insurance (T-2) or Interim binder (T-13).

The agent portion of the premium for the Texas Residential Limited Coverage Junior Mortgagee Policy (T-44) or Texas Residential Limited Coverage Junior Mortgagee Policy Down Date Endorsement (T-45) or Texas Residential Limited Coverage Junior Mortgagee Policy Home Equity Line of Credit/Variable Rate Endorsement (T-46) or Texas Residential Limited Coverage Junior Mortgagee Policy Additional Coverage Endorsement shall be retained by and paid to only the title insurance agent in the county where the land described in the policy or Endorsements is located if such title insurance agent performs either the: (i) title search; (ii) title examination; or (iii) issuance of the policy or Endorsements.

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.