Stewart is pleased to announce the availability of the Short Form Residential
Loan Policy with Florida Modifications. This format is ideally suited for lenders
who want to have a policy at closing and desire to reduce the amount of paper
contained in a policy. The forms are available from Stewart Forms and Information
department in Houston, 1-800-729-1901.
The policy can be utilized in a variety of situations.
This form may be used on the following property types:
One-to-four improved residential properties including Condos and PUD's.
Unimproved residential lots and acreage.
Purchase money mortgages.
Secondary and subordinate mortgages.
Special care must be exercised when issuing a Short Form Residential involving
secondary financing. The most important thing is to place all mortgages having
priority over the mortgages to be insured as exceptions in the Addendum.
Revolving Credit Mortgages. Since the approved Short Form does not contain
a blank to add additional endorsements, if an insured requests a Revolving
Credit Mortgage Endorsement, and the mortgage satisfied all underwriting requirements,
you may add the following to the Addendum:
Note: The Revolving Credit Endorsement approved by the Florida Department
of Insurance in §186-21 of the Administrative Code is incorporated herein.
Balloon Mortgage. If an insured requests a balloon mortgage and all underwriting
criteria are met, you may add a note in the Addendum as follows:
"Note: The balloon Mortgage approved by the Florida Department of Insurance
in §186-21 of the Administrative Code."
Construction Loans, one-to-four residential. Consult state counsel with
Any other permitted endorsements may be added to a policy in a like manner.
Should you have any questions regarding additional endorsement, please call
Stewart underwriting personnel.
How To Do It.
General Comments Regarding the Short Form Residential
It is the lender's prerogative to request the issuance of the Short Form
Policy, and you would expect to determine whether or not a lender wishes to
have the Short Form by reference to the closing instructions sent to you by
the lender. The rate charged for the Short Form would be the same as if you
are issuing a regular ALTA Loan Policy. The issuance of the short form policy
is no short cut in the preparation you have traditionally done in the issuance
of an ALTA Loan Policy. All the traditional skill and professional care in
record searching, document examination study of exceptions and title underwriting
must still be applied.
Schedule A Information
Amount of Insurance: This should reflect the amount of the mortgage being
Premium: Premium will be the premium that you charge for the issuance of a
regular ALTA Loan Policy, plus any premium-bearing endorsements.
File Number: Your own file numbering system.
Mortgage Amount: The amount of the mortgage to be insured.
Loan Number: The loan, if any, given to you by the lender.
Mortgage Date: The date the mortgage was executed.
Date of Policy: Normally would be the date of settlement. You should note
the actual date insofar as coverage is concerned will be determined by the
date of recording if it is later than the date of the policy. You should consult
lender's closing instructions for variations.
Name of Insured: The lender or the assignee of the lender if the assignment
is filed contemporaneously with the mortgage document. It will be permissible
to add "its successors and/or assigns" if requested by the insured.
Name of Borrowers: Those parties which execute the mortgage instrument.
Property Address: This should be the actual address of the property which
is security for the mortgage. It is important to recognize that neither form
contains a legal description; therefore, you must be absolutely sure that the
property address is correct. In the event the property does not have a street
address, enter: None.
County and State: County and state in which the property is located
Schedule A - The "Boxes"
In order to reduce the amount of paper and multiplicity of forms, it was determined
that boxes would be provided which would be checked off in the event additional
coverage is requested through use of the common endorsements. By utilizing
the boxes, it is unnecessary to attach the endorsement forms. If any of the
endorsements requested by the lender are premium-bearing endorsements, the
amount of premium charged for the endorsement should be included in the premium
amount in the upper, right-hand corner of the Short Form Policy.
Addendum: You would simply check the appropriate box, depending on whether
or not an addendum is necessary. Whether an addendum is necessary will depend
on the endorsements that are checked, what a survey reveals, and where there
is some special physical location, such as filled lands or seaside.
ALTA and Florida Endorsements: You will check the appropriate box reflecting
the ALTA and/or Florida Endorsements(s) requested by the lender. It is unnecessary
to attach any of the printed endorsements to the Short Form Policy or the Residential
Loan Certificate. However, the following observations are made:
ALTA Endorsement 4.1 and 5.1. Because Florida law given Condo and PUD associations
six (6) months of priority over first mortgages, you must always mark the 4.1
and 5.1 if the insured requests either Condo or PUD endorsement.
Florida Endorsement Form 9. If an insured requests this endorsement you must
be furnished a survey, either a current survey or a survey that meets the underwriting
criteria of prior bulletins. If the survey discloses matters such as encroachments,
you must except to these items in the Addendum. If an insured requests this
endorsement on a Condo or PUD property, you must decline to issue the endorsement
or amend paragraph l.(a) of the endorsement by placing in the Addendum the
"Paragraph l.(a) of Florida Endorsement Form 9 (3/27/92), incorporated
herein, is hereby amended to exclude assessment and maintenance liens which
by law have priority over the lien herein insured."
Florida Survey Endorsement. You must obtain a survey that meets underwriting
criteria of prior bulletins.
The greatest difference between the Short Form Residential Schedule B and
the Schedule B you deal with in the long form is that you are not required
to list specific exceptions. The pre-printed general exceptions will encompass
the vast majority of specific exceptions. The fact that you do not list specific
exceptions does not mean you perform any less rigorous examination procedures.
The main purpose of the Addendum is to add exceptions which would otherwise
not be included in the pre-printed exceptions in Schedule B. Some of the exceptions
that might appear are:
Encroachments shown on a survey. If the form 9 is issued, a survey must be
obtained and any encroachments must be excepted to. Depending on the nature
of the encroachment, the Company may be willing to delete all encroachment
from the Addendum but such a decision must be made by Stewart Underwriting
If the property is filled land and/or bordering water, the Addendum is the
proper place to place any appropriate exception. Consult prior bulletins for
normal underwriting requirements.
In the rare event that a Schedule C requirement in a commitment is to be
carried over into the policy as an exception, you should place the exception
on the Addendum page.