MTG

Mortgages

When analyzing mortgages, you must consider deeds of trust which allow nonjudicial foreclosures.

Requirement

MTGR01 STG

Require Release

The Company requires for its review and recordation a satisfactory release, reconveyance, or satisfaction of this mortgage.
Comment: The release, reconveyance, or satisfaction must comply with local practices. You must not rely on merger alone to waive a lien.

MTGR02 STG

Proof of Valid Foreclosure

The Company has been informed that the title to the land to be insured will be based on foreclosure proceedings. The Company will require for its review satisfactory evidence that the foreclosure has occurred in compliance with applicable law, that the foreclosure has extinguished all subordinate interests, and that the mortgagor is no longer in possession of the land. At that time, the Company may make additional requirements or exceptions.
Comment: You must determine that a prior foreclosure (judicial or nonjudicial) complied with applicable law and extinguished all subordinate interests. You must verify that the mortgagor is not in possession.

MTGR03 STG

Payoff of Equity Line Loan

Mortgage from _____________ to _________ recorded ____________, securing a note in the original principal sum of $_____________, and other obligations described therein. This mortgage secures an equity line loan. Prior to the final payoff, the Company requires a satisfactory written statement from the beneficiary that the account has been closed or frozen and, if applicable, satisfactory documentation from the borrower to close or freeze the account and/or a satisfactory full release for review and for recording concurrent with the payoff.
Comment: When paying off an equity or credit line mortgage, you must require the mortgagee to execute an unequivocal payoff that acknowledges the account is frozen and you must require that the borrower request a freeze of the line and tender all checks or cards. If this is not possible, you must hold the maximum possible amount that can be secured until you obtain a release.

MTGR04 STG

Require Delivery of Release by Private Lender

The mortgagee is an individual or other noninstitutional lender. If this mortgage is to be satisfied or released at closing, the satisfaction or release must be presented at or prior to closing.
Comment: If you close a transaction, demand that the release from any noninstitutional lender be delivered in escrow. You should not rely upon a written payoff because of the unreliability of such parties.

MTGR05 STG

Require Documents

Documents satisfactory to the Company creating the interest in the land and/or the mortgage to be insured must be signed, delivered and recorded.
Comment: The title commitment customarily requires a mortgage (or other instrument) from the proposed borrower. Additional requirements may be necessary when securing documents from fiduciaries or entities.

See Underwriting Manual

MTGR06 STG

Require Mortgage

The Company requires for its review a satisfactory mortgage by the proposed mortgagor. The mortgage must then be signed, delivered, and recorded.
Comment: The title commitment customarily requires a mortgage (or other instrument) from the proposed borrower. Additional requirements may be necessary when securing documents from fiduciaries or entities.

See Underwriting Manual

MTGR07 STG

Satisfactory Assignment

The Company requires for its review a satisfactory assignment of mortgage to the proposed insured mortgagee(s). In addition, the Company requires satisfactory evidence that the original note secured by the mortgage has been delivered to the proposed insured and has been properly endorsed.
Comment: In order to insure the assignee of a mortgage by new policy or endorsement, you should require a recorded assignment (in those states where required or customary). You must verify the original note is endorsed and delivered to the assignee or you must except to that issue.

MTGR08 STG

Satisfactory Subordination

The Company requires for its review an unconditional, properly authorized subordination of the mortgage.
Comment: If you rely upon a subordination of mortgage in order to insure priority, you must require that it (1) be specific to the transaction and not an automatic or future subordination; (2) be unconditional (or except to the conditions in Schedule B-Part I); (3) be properly authorized by specific resolution of the Board or Loan Committee of the prior mortgage and be kept in its record (unless the loan is a single family refinance of a superior lien); and (4) be for value (part payoff of the existing loan, construction finance, one of several simultaneous mortgages), unless the policy insures a refinance of a prior lien.

MTGR09 STG

On insurance of Building Loan Mortgage

1. Mortgage to be made herein is a building loan mortgage, and the building loan Contract or Agreement must be filed in the County Clerk’s office at or before the recording of the mortgage to be insured. The amount actually advanced on said building loan mortgage should be reported to the Company;
2. Building Loan Contract must contain the affidavit required by Lien Law § 22.
3. Survey to be redated to show completed building before final advance is made on the building loan contract.
4. Certificate of Occupancy and other departmental certificates to be submitted to the company for inspection at or before the time final payment is made on the Building Loan Contract.
5. Pending water charges to be fixed from the date of completion of the building erected on premises shown in Schedule “A.”
6. Pending disbursement clause will appear in policy.

MTGR10 STG

Satisfaction or subordination

Mortgage in (Liber, record Liber, Reel) ______ (C)p _____, held of record by __(name)__, must be satisfied and discharged of record at or prior to closing [on fee titles only: or policy will except the same.][on foreclosure search: (a) or mortgage must be foreclosed. (b) or mortgage must be cut off in foreclosure of prior mortgage.].

MTGR13 STG

Satisfaction or subordination

Mortgage in (Liber, record Liber, Reel) ______ (C)p _____, held of record by __(name)__, must be satisfied and discharged of record at or prior to closing or else properly subordinated to new mortgage to be made.

MTGR14 STG

Satisfaction or subordination

Mortgage in (Liber, record Liber, Reel) ______ (C)p _____, held of record by __(name)__, must be satisfied and discharged of record at or prior to closing or else properly subordinated to new mortgage to be made and to the consolidation thereof with the existing mortgage to be assigned.

MTGR15 STG

Satisfaction or subordination

Mortgage in (Liber, record Liber, Reel) ______ (C)p _____, covering premises and more, held of record by __(name)__, must be either released as to the premises herein described or satisfied and discharged of record at or prior to closing, or else properly subordinated to new mortgage to be made. [add where proper:] and to the consolidation thereof with the existing mortgage (to be assigned).

MTGR16 STG

Satisfaction in New York City only

In the event that any mortgage shown herein is to be satisfied at closing, the original bond or note and mortgage must be exhibited to the company at or prior to closing and the mortgage delivered to the company for filing with its title records.

MTGR17 STG

Upon insuring record holder of first mortgage a

If the mortgage to be insured is by recorded agreement or by its terms consolidated with the prior existing mortgages set forth herein, policy will recite immediately following the description of the mortgage being insured:

This mortgage was (by agreement dated __/__/__ ) or (by its terms) consolidated with the mortgage (or mortgages) excepted in Schedule “B” of this policy to form a single lien of $_______ and interest.

MTGR18 STG

Upon insuring a Collateral Assignment of Mortga

If the mortgage in (Liber, RL, Reel) ____ (C)p _____ is to be assigned as collateral security for a debt of the holder thereof, a financing statement must be filed in the office of the Secretary of State and also, if the assignor has a place of business within this State and only one county thereof, with the appropriate filing officer of that county.

MTGR19 STG

Upon Insuring a collaterally assigned mortgage

If the mortgage in (Liber, RL, Reel) ____ (C)p _____ is to be assigned as collateral security for a debt of the holder thereof, policy will except any right of redemption in the assignor and the terms and conditions of any agreement under which it was assigned to the insured. A UCC-1 must be filed in the appropriate offices, prior to the delivery of the assignment.

MTGR20 STG

Upon insuring a mortgage securing an antecedent

Any loss or damage by reason of the fact the insured mortgage secures an antecedent debt.

MTGR21 STG

Where mortgage to be consolidated or instrument

If the mortgage to be insured is merely being modified, or will be comprised of an existing mortgage or mortgages consolidated to form a single lien, or if additional collateral mortgages or instruments (such as an assignment of lessor’s interest in leases) are to be recorded, the provisions of Tax Law § 255 require the submission of duplicate original affidavits in order to obtain a savings on the mortgage recording tax.

MTGR22 STG

Normal transaction

This certificate and report of title has been prepared for the purpose of insuring a normal mortgage transaction. In the event there are unusual terms, or the mortgage is to be given as collateral security for the debt of another, or is being given for antecedent debt, the Company must be advised in advance of closing so that additional requirements or exceptions may be raised.

MTGR23 STG

Building Loan; Sale during construction

An agreement in recordable form must be entered into between the grantor, grantee and mortgagee, in which the grantor assigns to the grantee all of the grantor’s right, title and interest in the building loan contract and the moneys remaining to be advanced thereunder, and the grantor and mortgagee make a representation of the amount already advanced. The grantee must assume all of the obligations of the grantor under the building loan contract, including specifically the obligation required pursuant to Section 13 of the Lien Law, and the mortgagee must consent to the sale and assignment. The agreement must contain the affidavit required by Section 22 of the Lien Law, and must be filed within 10 days of execution. Consents to the assignment must be obtained from all persons who have supplied materials, or performed work, labor and services prior to the filing of the agreement (excepting those which have been fully paid).

MTGR24 STG

Building Loan; modification during construction

An agreement in recordable form must be entered into between the mortgagor and mortgagee, setting forth the modifications to be made, and containing a representation of the amount already advanced. The agreement must contain the affidavit required by Section 22 of the Lien Law, and must be filed within 10 days of execution. Consents to the agreement must be obtained from all persons who have supplied materials, or performed work, labor and services prior to the filing of the agreement (excepting those which have been fully paid).

MTGR25 STG

Where proceeds of building loan to be used for

If any part of the proceeds of the building loan mortgage are to be advanced at the time of closing for the satisfaction or assignment of an existing mortgage, proof must be provided satisfactory to the Company that no materials have been furnished or work has been done at the premises for which a mechanic’s lien may be filed.

MTGR26 STG

Wraparound mortgages

Company is advised that the mortgage to be insured is a “wraparound mortgage.” The following requirements and exceptions are made:

(a) the terms, covenants, conditions and provisions of the underlying mortgage(s) are excepted;
(b) estoppel certificates are required from the holders of existing mortgages (or exception will be taken against all loss, cost or damage, including attorney’s fees, resulting from a failure to obtain such estoppel);
(c) the proposed loan documentation is to be submitted to the Company for review in advance of closing (additional exceptions will be raised);
(d) the policy will except judgments and liens arising after the date of closing, which may obtain priority over the lien of the insured wraparound mortgage;
(e) the insured wraparound mortgagee must join in the mortgage for the purpose of assuming the obligation to pay the principal and interest of the underlying mortgage(s);
(f) in the event the insured desires the policy be updated by endorsement at the time payments or advances are made, same will be available if permitted at the time of the issuance of such endorsement, and if the charges therefor are paid in accordance with the requirements of the rate manual in effect at the time of such endorsement.

MTGR27 STG

Defect in mortgage chain

The mortgage recorded in ______________ cannot be assigned or discharged by reason of the following:

[recite the reason, such as:

assignment from ________ to ________ is missing
there is no assignment into the purported holder
a correction assignment is required]

Note: You may add additional local requirements here. Please consult with our underwriting personnel in preparing appropriate provisions.

Exception

MTGX03 ALTA

Partially Released

A portion of the land originally encumbered by mortgage recorded ____________, has been released by document recorded ________________.
Comment: You should describe any partial release of a mortgage to the extent it covers the examined land.

MTGX04 ALTA

Assignment

According to the public records, the beneficial interest under the mortgage recorded __________, was assigned to __________, by assignment recorded __________.
Comment: You should use this language if the mortgage has been assigned of record.

MTGX06 ALTA

Modification

A document recorded ____________ provides that the mortgage recorded ________, or the obligation secured thereby, has been modified.
Comment: You should use this language in describing a modification. A modification may cause a creditor’s rights issue if the lender receives more beneficial terms; the Policy or applicable endorsement must contain a creditor’s rights exception or exclusion if you insure the modification unless you secure approval by the Company.

MTGX07 ALTA

Assignment of Rents

An assignment of _____, recorded _____, as additional security for the payment of the indebtedness secured by the mortgage recorded __________.
Comment: You should use this exception in describing lease or rental assignments. The Company prefers not to add this language in Schedule A when describing the mortgage.

MTGX08 ALTA

Not all of Collateral Insured

The indebtedness secured by the lien of the insured mortgage described in paragraph 4 of Schedule A, is also secured by property other than the land described in paragraph 5 of Schedule A.
Comment: If the mortgage secures other land not covered by a Policy, the Company prefers to add this note.

MTGX09 ALTA

Subordination

A document recorded ______, provides that the lien or charge of the mortgage recorded _______ was subordinated to the _______, recorded _________.
Comment: You should use this language if a mortgage or other matter is subordinated and contains conditions.

MTGX10 ALTA

Policy Insures Subordination

The item recorded ___________ is subordinate to the lien of the insured mortgage.
Comment: Use this language if a subordination is unconditional, is specific to the transaction, and is properly authorized.

MTGX11 ALTA

Foreclosure Suit

Suit to foreclose the mortgage recorded __________ has commenced, as evidenced by document recorded __________.
Court:
Case No.:
Attorney Information:
 Name:
 Address:
 Phone Number:
Comment: You should use this language to describe a pending suit to foreclose.

See Underwriting Manual

MTGX12 ALTA

Insured Assignment Exception

Impairment, loss or failure of title to the beneficial interest transferred to the insured resulting from:
(A) Lack of possession of the original promissory note, secured by the insured mortgage, or
(B) The absence from the original promissory note of a proper endorsement to the insured assignee.
Comment: You should use this language in the Loan Policy or in the assignment endorsement that insures an assignment unless the endorsement (if issued) contains a similar exception, or unless the assignment is from institutional lender to institutional lender on 1-4 family residential property, or unless you verify that the endorsement and delivery occurred.

MTGX13 ALTA

Collateral Assignment

According to the public records, the beneficial interest, under the mortgage recorded _________________, was collaterally to ______________, by assignment recorded ______________.
Comment: You should use this language if a mortgage is collaterally assigned. You must obtain releases or assignments from both the assignor and assignee. You must not insure a collateral assignment unless you except to the terms of the collateral assignment, you except to the right of the collateral assignor, and the note is delivered to the collateral assignee. In the alternative, the policy may insure the collateral assignor and assignee “as their interests may appear.”

MTGX14 ALTA

Additional Advance

A document disclosing an additional advance in the amount of $_____ recorded _______ pursuant to that mortgage recorded _____________.
Comment: Use this provision when an additional advance has been made as evidenced by recorded instrument. However, intervening interests may have priority over the advance.
Comment: If the mortgagor or a related party (possibly acting for the mortgagor) reacquires title after a foreclosure, all subordinate matters, including subordinate mortgages or deeds of trust, may be deemed to be reinstated. If this situation may occur in the proposed transaction, add this exception.

MTGX18 STG

Insured Mortgage Secures Other Debt

Mortgage from ___________ to ___________ recorded ___________ to the extent it secures indebtedness and obligations other than that note described in Schedule A.
Comment: Sometimes a policy insures a mortgage only in connection with a specific portion of debt (e.g., one facility or note). In that case, the policy may describe the mortgage in Schedule A as it secures that note and may then except to the mortgage in Schedule B as the mortgage secures other debt.

MTGX19 STG

Mortgage (Describes Debt)

Mortgage from ____________ to ____________ recorded ____________, securing a note in the original principal sum of $____________, and other obligations described therein.
Comment: The Company prefers not to use this provision. Instead, the Company prefers to describe a mortgage without statement of any specific debt (e.g. MTG31).

MTGX20 STG

Mortgage (Does not Describe Debt)

Mortgage from ____________ to ____________ recorded ____________, securing the indebtedness and other obligations described therein.
Comment: The Company prefers to use this provision in describing a mortgage so that the policy does not describe specific debt.

MTGX22 STG

General Subordinate Matters Exception

Matters which affect the title to said estate or interest, but which are subordinate to the lien of the insured mortgage.
Comment: You should use this language if you determine that the matter not otherwise excepted (such as a judgment lien) is subordinate to the insured lien. If the subordination is conditional, you must specifically except to its terms. You may use this language or show the subordinate matters in Schedule B-Part II.

See Underwriting Manual

MTGX23 STG

Not all of the Collateral is Insured

The indebtedness secured by the lien of the insured deed of trust described in paragraph No. 4 of Schedule A is further secured by property other than the land described in paragraph No. 5 of Schedule A. The title to such additional property is not insured hereby.
Comment: If the mortgage secures other land not covered by a Policy, the Company prefers to add this note.

MTGX24 STG

Questionable Assignment (Not in Chain)

An assignment from ______________ to ______________ recorded which purports to transfer the beneficial interest under said mortgage. At the date thereof, the named assignor was not the record holder of the beneficial interest.
Comment: You must use this exception if the assignor did not appear to be the current mortgagee. You must also require that the record holder assign its rights in order to rely on a release or assignment.

MTGX26 STG

Where advances vary from building loan schedule

Policy excepts all loss, cost or damage arising from any variation between the advances actually made and the installments set forth in the Building Loan Schedule.

MTGX27 STG

Rights of lienors prior to Building loan modifi

Policy excepts possible lien rights of mechanics and material suppliers who have supplied materials or services or have contracted to do so, prior to the date of the Building Loan Modification.

Note: You may add additional local exceptions here. Please consult with our underwriting personnel in preparing appropriate provisions.

MTGX28 STG

Collateral mortgage (or where mortgagors are no

To the extent that the mortgage is made for the security of the debt of another, policy excepts the rights of mechanic’s lienors filing within 8 months after the recording of the mortgage, based on work commenced prior to the recording of the mortgage, and policy further excepts the terms, conditions and provisions of any underlying agreement in connection with the making of the mortgage.

Schedule A

MTGS01 STG

Other Collateral

For Informational Purposes Only: The indebtedness secured by the mortgage is or may be additionally secured by _______________, which is not insured.
Comment: The Company prefers to describe collateral documents (such as UCCs or lease assignments) in a note or in Schedule B, instead of in Schedule A, when insuring the related mortgage.

MTGS02 STG

Mortgage (Describes Debt)

Mortgage from ____________ to ____________ recorded ____________, securing a note in the original principal sum of $____________ described therein.
Comment: The Company prefers not to use this provision. Instead, the Company prefers to describe the mortgage without describing any specific debt.

MTGS03 STG

Mortgage (Does not Describe Debt)

Mortgage from ____________ to ____________ recorded ____________, securing the indebtedness described therein.
Comment: The Company prefers to use this provision in describing a mortgage so that the policy does not describe specific debt.

MTGS04 STG

Partially Released

A portion of the land has been partially released by the instrument recorded ________________.
Comment: You must describe any partial release of a mortgage to the extent it covers the examined land.

MTGS05 STG

Assignment

Assigned to ____________ by the instrument recorded ____________.
Comment: You should use this language if the mortgage has been assigned of record.

MTGS06 STG

Modification

Modified by the instrument recorded ____________.
Comment: You should use this language in describing a modification. A modification may cause a creditors’ rights issue if the lender receives more beneficial terms; the Policy or applicable endorsement must contain a creditors’ rights exception or exclusion if the policy insures the modification unless you obtain approval by the Company.

MTGS07 STG

Assignment of Rents

An assignment of rents and leases to ____________ recorded.
Comment: You should use this exception in describing lease or rental assignments. The Company prefers not to add this language in Schedule A in the description of the mortgage.

MTGS08 STG

Additional Advance Made

An additional advance secured by said mortgage, as disclosed by an instrument recorded _________________.
Comment: You must use this provision when an additional advance has been made as evidenced by recorded instrument. Intervening interests may have priority over the advance.

MTGS09 STG

Mortgages

Mortgage in (Liber, record Liber, Reel) ______ (C)p ____(if more than one and consolidated, set up all mortgages and consolidation agreements) herein set forth is a valid __(numerical order of lien)__ mortgage upon the premises herein described for the amount unpaid thereon, and can be assigned by __(name)__, the record owner and holder thereof.

Note: You may add additional local Schedule A provisions here. Please consult with our underwriting personnel in preparing appropriate provisions.