Common Endorsements for Lenders

1. Common Endorsements for Lenders

2. Definition of Endorsement • Provision added to an insurance contract altering its scope or application • Issues that are not covered or insured over in a standard or extended policy

3. LTAA 3R, CLTA 100 • Protects lender against loss resulting from • CC&R’s which can impair the lien of the mortgage • Present violations of CC&R’s • Encroachments onto or off of the insured land

4. LTAA 3R, CLTA 100 (cont.) • Future violations of CC&R’s occurring prior to foreclosure of the insured deed of trust • Damage to improvements due to encroachment onto easements or due to extraction of minerals • Final court order requiring removal of any of insured’s improvements from adjoining lands

5. LTAA 5, CLTA 116 (modified) • Provides assurance to lender as to nature of improvements (e.g. vacant, existing residential, etc.) • CLTA 116 shows the purported street address − LTAA 5 does not

6. ALTA 9, CLTA 100.2 • Much the same as the LTAA 3R, but adds coverage as to • Violation of set backs • Liens and easements created by CC&R’s • Environmental liens

7. ALTA 3, CLTA 123.1:Zoning − Vacant • States applicable zoning ordinances and amendments • Shows uses allowed under the stated classification • Title company requires a zoning letter to issue this endorsement

8. ALTA 3.1, CLTA 123.2:Zoning − Improved • Same as the ALTA 3 plus • Covers loss resulting from a court order prohibiting use or forcing removal or alteration of improvements • Title company requires a zoning letter to issue this endorsement

9. CLTA 103.7:Access, Land Abuts Street • Insures that property abuts or has access to a specified physically open street

10. CLTA 116.1:Survey • Guarantees that insured property is exactly same property as described on specified survey • Eliminates risk that survey inadvertently describes wrong property

11. AZ Form 226, 227, 228:Patent • Insures against loss resulting from the exercise of rights under the patent

12. CLTA 103.5:Water • Insures against damage to existing improvements due to the extraction of water through the surface of the land

13. ALTA 5, CLTA 115.2:PUD • Insures lender that mortgage has priority over HOA liens • Covers against loss resulting from violation of CC&R’s and certain encroachments

14. ALTA 6, CLTA 11.5:Variable Rate • Insures lender against the invalidity, unenforceability or loss of priority of the insured mortgage as a result of changes in interest rate • This endorsement may help avoid having to do a modification later

15. ALTA 8.1, CLTA 110.9:Environmental • Insures lender against any loss or damage sustained by reason of loss of priority of the insured mortgage to any environmental protection lien • Recorded at the recorder’s office • Filed in the records for the clerk of the US District Court • Provided for by Arizona statute • Note: ALTA 8.1 (modified) & CLTA 110.9 (modified) are for non-residential properties

16. AZ Form 211.1, CLTA 110.1:Modified Creditor’s Rights • Removes the creditor’s rights exclusion from the policy