Generally, the insured is the fee owner, the lessee, or the mortgagee. If you are asked to insure an optionee, a collateral assignee, or a person who does not hold title, please call the Company.
Insured Is Not Owner
The coverage provided the insured under this Policy is subject to any rights, defenses, and exclusions which the Company may have against the person shown vested with the estate or interest in the land described in Schedule A.
Comment: The policy may insure a party who is not the owner: for example, an optionee, partner, or stockholder. If the Company approves issuance of the policy, you should add this exception for defenses applicable to the record owner (such as matters the record owner created or knew).
Assigns Except Obligors – Loan Policy
________________, and each successor in ownership of the indebtedness secured by the insured mortgage, except a successor who is an obligor under the provisions of Section 12(c) of the Conditions and Stipulations.
Comment: This language is sometimes requested by lenders in Schedule A of a Mortgagee Policy. It is the only language available to insure assignees in a Mortgagee Policy in Texas. If no such language appears in Schedule A, the Policy still insures to assignees who are not obligors.
See Underwriting Manual
HUD – Loan Policy
__________ and/or The Secretary of Housing and Urban Development of Washington, D.C., their respective successors and assigns as their interests may appear.
Comment: This language is frequently added in Schedule A on Mortgagee Policies covering HUD insured loans.
VA – Loan Policy
___________ and/or The Secretary of Veterans’ Affairs, an officer of the United States of America, their respective successors and assigns as their interests may appear.
Comment: This language is frequently added in Schedule A on Mortgagee Policies covering VA guaranteed loans.
HUD – Owner’s Policy
The Secretary of Housing and Urban Development of Washington, D.C., and its successors in office.
Comment: When issuing an Owner’s Policy to HUD, do not add the phrase “and assigns,” after the name of the insured since the Policy is not “assignable” to its buyer.