VA Policy Authorization Construction Loan with MLA

POLICY AUTHORIZATION
CONSTRUCTION LOAN  • WITH MLA

Note: this approval is conditioned upon this project being “posted” i.e. A MECHANIC’S LIEN AGENT IS TO BE APPOINTED.  NOTIFY THE UNDERSIGNED IF THIS CONDITION IS NOT TO BE MET.

Date: ______________________________               Borrowers: ___________________________________

To:  __________________________________                     Property: _____________________________________

Policy Amount:  $ _________________________ l/a                          _______________________________, County

You are hereby authorized to issue our commitment/policy for the above referenced case.  This authorization is subject to the following instructions.

a)      As to the proposed Loan Policy only, you may extend affirmative mechanics’ lien coverage in accordance with Stewart Title Guaranty Company’s Mechanic’s Lien Coverage Policies and Procedures.

b)      Obtain Indemnity Agreement I executed by:

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The fully executed Agreement must be in your file PRIOR to your issuance of the Policy and the first draw endorsement.

            YOU MUST RETAIN THE ORIGINAL EXECUTED INDEMNITY AGREEMENT IN YOUR FILE.

c)      At each draw request, you must have from all subs/suppliers giving notice to the MLA subcontractor/supplier Waivers of Liens for all work done or materials furnished through the previous draw.  If you do not have all required waivers in hand, YOU MAY NOT CLEAR THE NEXT DRAW.

d)      YOU MUST USE THE LIMITED PENDING DISBURSEMENT CLAUSE (STEWPEND) AND DRAW ENDOSEMENT (STEWEND) AND ATTACH COPIES OF EACH TO YOUR COMMITMENT.   

e)      OTHER:  1) Obtain MLA Certificate at each draw; 2) Collect lien waivers from any party giving notice to the MLA at each draw; __________________________________________________________________

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This approval is contingent upon your firm promptly notifying Stewart Title Guaranty Company if any mechanic’s/materialmen’s liens are filed of record or if other indications of the subject builder’s distress become apparent.

Please contact the undersigned if you have any problems or questions regarding this procedure.

STEWART TITLE GUARANTY COMPANY

By: _____________________________________