On October 19, 1996, the American Land Title Association (ALTA) adopted new policy
forms that may be issued on junior loans relating to one-to-four family residences
or condominiums. These forms will simplify procedures for lenders.
Stewart Title is in the process of filing these forms in many states. If your
state requires that these forms be filed before use, please review these forms
and verify that they are effective. You also may continue to issue the Home Equity
Policy where previously available.
The ALTA Residential Limited Coverage Junior Loan Policy
includes the Insuring Provisions, Exclusions From Coverage, Conditions and
Stipulations, and Insert (or Schedule). This form does not insure the validity
of the insured's mortgage and it does not insure that the Grantee (who will
generally be the mortgagor) owns the land. It does provide defense costs as
stated and does insure a later owner of the debt secured by the insured's
mortgage. This form is issued before the Junior Mortgage is executed; it is
similar to a commitment to insure.
It insures these matters:
the Grantee named in the policy is named as the
vestee or grantee in the last recorded deed purporting to convey the fee
the land described in the policy is the same as the
land described in the deed to the Grantee;
there are no outstanding recorded monetary liens
(such as judgment liens, tax liens, deeds of trust and mortgages on the title,
even if they attached before the Grantee's deed); and
there are no ad valorem taxes or assessments owed to
the government and secured by liens according to the local tax records.
Endorsement Form JR
(ALTA Residential Limited Coverage Junior Loan Policy Supplemental Coverage)
This form is a continuation endorsement to the Junior Loan Policy. It is generally
requested at the time the insured''s mortgage is executed. It will show
intervening liens or deeds recorded after the Policy and it will show the insured's
Endorsement Form JR
(Revolving Credit/Variable Rate to Residential Limited Coverage Junior Loan
This form endorses the Junior Loan Policy
to provide insurance as to revolving credit and variable rate provisions in the insured's
Short Form Residential Limited Coverage Junior Loan Policy
shortens the Policy by incorporating the Insuring Provisions, Exclusions From Coverage, and
Conditions and Stipulations and by containing the Insert (or Schedule) information on the same
ALTA Residential Limited Coverage Junior Loan Policy
Search.: You must search from the date of the execution
of the last deed involving a sale for recorded "monetary liens" against the
land and for the period of local custom (but not less than 10 years) for
general liens (such as tax liens and judgment liens) against the "Grantor"
named in the policy (person named as the grantee in the last recorded deed).
You also must search for the last deed purporting to convey the land to
determine the "Grantee." You must secure a tax and assessment search to
reflect the current tax information.
Amount of Insurance:This is the amount requested by the
lender; it should be the proposed loan amount. Do not issue this Junior Loan
Policy without underwriter approval if the Amount of Insurance will exceed
Name of Insured: This is the proposed lender which will
receive a junior mortgage. Do not issue this Junior Loan Policy without
underwriter approval unless the Insured is an institutional lender. Do not
issue to an individual without underwriter approval. Do not add "its
successors and assigns" without underwriter approval.
Date of Policy: This is the date through which you
examine title before issuing the Junior Loan Policy. This date generally
precedes the date of issuance of the insured's mortgage.
Grantee: This person is the owner according to the last
conveyance (generally deed) in your local real property records. You need to
search only for the last recorded deed. The Junior Loan Policy does not insure
that the Grantee owns the land. If the last deed purports to convey only an
undivided interests, you must show the other "Grantees" of the remaining
undivided interests. Some insureds may require that the Junior Loan Policy
refer to the deed; if so you may add after the name of the "Grantee" words
such as ?pursuant to deed dated [here insert deed date] from [name of grantor]
recorded [here insert date of recording and recording information].? You may
attach the deed if requested; however, the Junior Policy does not require that
you attach the deed or monetary liens.
The land referred to in this policy is described as
follows. This is the legal description of the land. You must verify that this
description also is the same description appearing in the deed to the
?Grantor.? If your insured requires a reference to the Property Address on the
Junior Loan Policy, you may add after the description words such as "Property
address of the land is:_______." You must review the tax search or certificate
to insure the address.
Exceptions: You must show all outstanding recorded
monetary liens under the "Exceptions." Monetary liens include judgment liens,
child support liens, federal tax liens, state and local tax liens, other
governmental liens, mortgages, deeds to secure debt, deeds of trust, and
notices of overdue subdivision or condominium maintenance assessments.
Monetary liens do not include covenants, conditions and restrictions,
condominium declarations or easements; monetary liens do include specific
recorded notices of overdue assessments. You need only to search for
outstanding recorded monetary liens (1) recorded on or after the date of the
execution of the last deed involving a sale (generally this is the deed to the
Grantor), or (2) against the Grantor according to your general name search
(for judgments, tax liens, etc.) for the period of local custom (but no less
than 10 years). If you do not have enough room on the form, you may refer to
and attach an Addendum or Exhibit. You may attach copies of the recorded
Monetary Liens if your insured requests, but this Policy does not require that
copies be attached. As a courtesy to the insured, you may show as an Exception
or in a separate letter to the insured a lis pendens or notice of bankruptcy
recorded after the deed to the Grantee; however, the Policy does not insure as
to these matters.
Tax Information: You must secure a tax and assessment
search. You must show all taxes and governmental assessments that are a lien
on the title according to the search. If the current year's taxes are not
known but are a lien, you may except to "taxes for the year ____, not yet due
and payable," in order to accommodate the insured. You may show additional tax
information if requested by your insured, such as Tax Parcel Number, Assessed
Value of Land/Improvements, Exemptions (including Type and Amount), and Amount
of Taxes for prior years. If you do not have enough room on the form, you may
refer to and attach an Addendum or Exhibit.
Short Form Residential Limited Coverage Junior Policy
You issue this Policy based on the same
requirements and search as you use for the ALTA Residential Limited Coverage
Junior Loan Policy. If you do not have enough room on the form for the
Exceptions, you may mark the line which states "________ Addendum containing
additional exceptions attached" and then add the Exceptions to an Addendum.
Endorsement Form JR 1 (ALTA Residential Limited Coverage Junior Loan
Policy Supplemental Coverage)
You issue this Endorsement after you issue the Junior Loan Policy.
Endorsement Form JR 2 (Revolving Credit/Variable Rate
Endorsement to Residential Limited Coverage Junior Loan Policy). You may issue
this Endorsement when you issue the Endorsement JR 1, if you describe the
insured's mortgage in the JR 1. If your state law requires that the mortgage
contain specific language (such as a heading) in order to secure future advance,
verify that the mortgage contains the required language. You do not need to
attach this Endorsement to the Junior Loan Policy or to Endorsement JR 1 unless
the insured requires that this Endorsement be attached; you may simply mark the
Box C of Endorsement JR 1.
Paragraph A(1): Under this paragraph you show deeds and
other conveyances of the title recorded subsequent to the Date of Policy of the
Junior Loan Policy. You examine title from the Date of Policy to provide this
Paragraph A(2): Under this paragraph you show monetary
liens found in the search of the title and in the general name search against
the "Grantor" after the Date of the Junior Loan Policy. You also do your
customary general name search for liens against the name of any subsequent
grantee shown in a document excepted in Paragraph A(1).
Paragraph B: Under this paragraph you show the insured's mortgage
which has been recorded or which is furnished to you for recording. You do
not need to show recording information if the insured furnishes the original
mortgage to you for recording and if the insured requires immediate issuance
of the Endorsement. If you receive the original mortgage for recording, you
may issue Endorsement JR 2 immediately after doing your search to the most
recent date possible and prior to receipt of the recording information of
the insured's mortgage if the insured requires such immediate issuance.
If you are requested to issue this Endorsement before the execution of the
mortgage, you should delete Paragraph B. If you then issue a second or later
Endorsement JR 1, you should include all exceptions appearing in the prior
Endorsement(s) JR 1.
Paragraph C: If the insured request issuance of the Endorsement JR
2 (Revolving Credit/Variable Rate), you may mark this box. You do not need
to attach a copy of Endorsement JR 2, unless the insured requires a copy.
If your state law requires that the mortgage contain specific language (such
a heading) in order to secure future advances, verify that the mortgage
contains the required language.
Date of Endorsement: This is the date through which your examination
is made. You may date the Endorsement as of the date of the insured's
mortgage and subsequent to the most recent date of examination possible,
if (1) the insured requires that the Endorsement be issued before the recording
information is possible and before an examination through that date is possible
and (2) you receive the original mortgage for immediate recording. If you
requested to issue this endorsement before the execution and delivery of
the insured's mortgage for recording, delete the phrase "Date
of Endorsement is the date shown above or the date of recording of the insured's