The American Land Title Association has adopted two new endorsements: the ALTA
11 (Mortgage Modification) and ALTA 12 (Aggregation). These endorsements are
in the process of being filed in those states in which filing is required. The
ALTA Form 11 Endorsement will bear a premium as provided in the rate filing or
as provided in our local instructions (if no rate filing is required).
ALTA Endorsement 11 (Mortgage Modification)
This endorsement insures the lender that (1) the modification of mortgage
does not result in invalidity or unenforceability of the insured mortgage;
(2) the mortgage, as modified, has priority over defects, liens, and encumbrances,
except those in the policy and prior endorsements and except those set forth
in this endorsement. The endorsement does not insure against creditors' rights
issues arising out of the modification.
· You must search the public records from the Date of Policy of the
mortgage and you must secure a name search of the mortgagors and successors
· Require joinder in the modification by the current owners of the
estate or interest in the land and require proof of authority by those
signing on behalf of the current owners.
· If the mortgage covers a lease, require a current estoppel and
consent by the lessor.
· If the policy reflects a mortgage or other lien in Schedule B,
Part II (as subordinate), require new subordination by the lienholder or
under paragraph 2 of the Endorsement.
· If your search reflects intervening matters such as mortgages,
liens, covenants or easements, require subordinations or except under paragraph
of the Endorsement.
· If your search reflects a notice of bankruptcy by the owner, require
a final nonappealable order authorizing the modification.
· If your search reflects a partial release, reconveyance or discharge
of the mortgage, except under paragraph 2 of the Endorsement. If your search
reflects a full release, reconveyance or discharge, do not issue this Endorsement.
· If your search reflects that the record mortgage holder is not
the current lender on the modification, require an assignment from that holder.
· Secure a current tax and assessment search. Except under paragraph
2 of the Endorsement to unpaid taxes and assessments.
· Verify that the mortgage as modified does not secure advances for
construction and that there has been no recent lienable work of improvement.
· Verify the parties in possession. If the Loan Policy does not contain
an adequate exception, add an exception to those rights in paragraph 2
of the Endorsement.
· Require a current survey, unless our survey guidelines do not require
a survey, or unless you except to survey matters arising subsequent to
Date of Policy.
· Record the modification.
ALTA 12 (Aggregation)
This Endorsement is called the "tie-in," "cluster," or
"spreader" endorsement. It is issued with the Loan Policy in many states on
The Endorsement aggregates the Amount of Insurance on each Loan Policy listed
in the Endorsement. This Endorsement to multiple Loan Policies results in one
liability for all policies; it creates the same result as one Policy covering
multiple sites. This Endorsement is not designed to be issued with the Owner's
· Underwriting Personnel of the Company (Stewart Title Guaranty Company)
must approve issuance of this Endorsement.
· If the aggregate limit of liability exceeds the Company's
self-imposed or statutory limits for single risks in your state, you must
contact the Reinsurance
Department of the Company.
· We prefer to show allocated amounts for the "Amount" of
each policy, rather than the aggregate (generally the loan amount) liability
for the separate Amount of Insurance for each Policy.
· This Endorsement is not available in some states. The multistate
Aggregation Endorsement may not be issued in Florida. In Florida, only
intrastate tie-in endorsements may be issued. In Texas, Pennsylvania, and
no tie-in or aggregation endorsement may be issued. In those states, one
policy may be issued covering all tracts located in the state.