NM 84 Endorsement (Disbursement) is designed to be used solely with NM Construction Loan Endorsements 83 and 83.1.
NM 84 Endorsement (Disbursement) is designed to be issued in conjunction with a construction loan disbursement during a construction project. NM 84 Endorsement (Disbursement) extends the Date of Coverage as defined in the NM 83 and 83.1 Construction Endorsements, but it does not alter the Date of Policy.
1. This endorsement should be used only for a loan policy during construction.
2. If the loan policy contains an NM Construction Loan Endorsement 83 or 83.1, you should use only NM 84 Disbursement Endorsement to change the Date of Coverage. You should not use STGC Construction Loan Endorsement or any other form of date down endorsement if the loan policy contains the ALTA Construction Loan Endorsement 83 or 83.1.
3. The issuance of an NM 84 Disbursement Endorsement is conditioned upon the absence of any filed or recorded mechanic’s liens or notices of mechanic’s liens, which have not been resolved to the satisfaction of the Company (e.g. paid, bonded, etc.). Prior to the issuance of an NM 84 Disbursement Endorsement, continuation of title must be performed, which continuation reveals no mechanic’s liens or notices of mechanic’s lien recorded or filed with respect to the project. You should not issue an NM 84 Disbursement Endorsement if your continuation of title shows any outstanding mechanic’s liens or notices of liens which have not been resolved to the satisfaction of the Company. If your title continuation reveals outstanding unresolved mechanic’s liens or notices of liens, consult with an underwriter before issuing the NM 84 Disbursement Endorsement.
4. The issuance of an NM 84 Disbursement Endorsement is also subject to the following additional requirements being met at the time of each disbursement of proceeds of the loan:
A. a title search is made by the Company that reveals no liens, objections or any adverse changes in the title,
B. the contractor and owner furnish the Company satisfactory paid bills, liens waivers, estoppel certificates and other evidence that all items from which a lien might arise, have been paid or otherwise satisfied, and
C. the Owner and Contractor furnish the Company satisfactory updated Affidavit and Indemnity Agreement(s) as to the matters referred to in B above.
5. The NM 84 Disbursement Endorsement contains several blanks and optional [bracketed] sections, which may be completed as follows:
A. Date of Coverage: The Date of Coverage will be determined as instructed by an underwriter. The Date of Coverage will likely be dependent upon the specific aspects of the transaction, including, for example, indemnities. Depending upon the transaction, the Date of Coverage may be amended from time to time to be the date of the current disbursement, the date of the prior disbursement, or the date for which satisfactory proof of payment or lien waivers have been received.
B. Current Disbursement / Aggregate Amount: The Current Disbursement and Aggregate Amount will be determined as instructed by an underwriter. In general, if requested by the Insured, these amounts can be inserted upon receipt by the Company of satisfactory proof of payment, pursuant to the applicable form of ALTA Construction Loan Endorsement.
C. Part I: Additional Schedule B, Part I Exceptions: You should use this section to add additional exceptions, if any, disclosed by your continuation, using the following text: “Schedule B is hereby amended to add the following exceptions: ”.
D. Part II: Additional Schedule B, Part II Exceptions: You may use this section to add additional subordinate matters, if any, disclosed by your continuation, using the following text: “Schedule B-II is hereby amended to add the following exceptions: ”. You should not use this section for any mechanic’s liens without underwriter approval.