Stewart Title Guaranty is pleased to introduce the Home Equity Policy (H.E.P.) program. This program was developed to provide value-priced title insurance coverage on institutional equity loans and is to be issued only to institutional commercial lenders making equity loans on 1-4 residential dwellings. This product should prove useful when marketing to lenders who specialize in equity financing.
The policy consists of: (1) a policy jacket; (2) a Schedule "A"; (3) a continuation endorsement; and (4) a revolving credit/variable rate endorsement. Please see referenced forms at the end of this bulletin.
1. Policy jacket
There are no traditional insuring clauses. The coverage is limited to loss due to any incorrectness of the assurance made in Schedule A.
The only items needed are the legal description, property address, tax information, last conveyance, mortgage and lien information. You will need to search for these items. You do not have to search other title matters.
This form can be used either to "down date" title prior to closing and recording of the equity loan documents or, subsequent to the recording of the loan documents to reflect the recording.
4.Revolving Credit/Variable Rate Endorsement
This form can be used when the loan has a revolving credit feature, a variable rate feature, or both.
The filed rate in South Carolina is $2.00 per $1000 of liability and includes the continuation endorsement and the revolving credit/variable rate endorsement. The charge does not include search and settlement fees.
Should you have any questions, please contact the Stewart personnel with whom you customarily deal with or any Senior Underwriter in Houston.
Practices for Home Equity Policy
Customer Group. Applications or orders for HEP should only be accepted from institutional commercial equity lenders making consumer loans.
Included in this identified group are banks, savings and loan associations, and credit unions.
Type of Property. The HEP can be used only for 1-4 residential dwellings.
Lending Limitations: Loans in excess of $200,000 must be approved by approved underwriting personnel.
Underwriting and Legal Decisions. Questions relating to underwriting are to be referred to Senior Underwriters in Houston.
Type of Loans. The HEP is available only for secondary financing, not for first mortgages.