NM Construction Loan Policy Endorsement D Guideline 19
Explanation:A Construction Loan Policy is issued to a lender making a construction loan secured by a mortgage on the parcel of land to be improved. The policy insures against the invalidity or unenforceability of the lien of the mortgage and against loss or damage should the priority of the mortgage be other than as shown in the policy. It is similar to the Loan Policy except that no mechanics' lien coverage is provided by the Construction Loan Policy, but instead by Endorsement "A" or Endorsement "D", depending on the facts of the situation.
Endorsement "D" insures against lack of priority of the insured mortgage over mechanics' liens for labor or material furnished before or after the date of policy. This endorsement is designed to be used in those cases in which the mortgage has priority over mechanics' liens.
This form excludes liability for loss or damage by reason of the failure of the mortgagor to comply with or enforce the terms of any loan agreement which concerns the advancing of loan proceeds.
Rate: See Regulation 13 NMAC 126.96.36.199
Procedure: See Regulation 13 NMAC 188.8.131.52.
Underwriting Requirements:(1) An inspection of the land, performed at the time of recording of the deed of trust or mortgage, discloses that no work has been commenced and no materials furnished.
(2) A written report of the inspection should be included in the transaction's file. It is helpful if this report includes photographs confirming the findings noted on the report.
The underwriting guidelines contained herein have been provided for general reference. The facts, circumstances, and location of the subject property should be considered when determining the issuance of the requested form or endorsement. Please note that all of the forms and endorsements included in this system may not be available in all states. Accordingly, please contact the appropriate Stewart Title Guaranty Company underwriting personnel in order to determine availability.
Compliance with the underwriting guidelines contained herein in no way obligates Stewart Title Guaranty Company to issue any form or endorsement.
This guideline applies to the following form(s):None