ALTA ENDORSEMENT 9 SERIES: RESTRICTIONS, ENCROACHMENTS, MINERALS
ALTA endorsements 9-06, 9.1-06 and 9.2-06 were modified and the Florida Form 9.1, ALTA 9.3-06 and 9.5-06 endorsements are no longer in use. The title of the ALTA 9-06, 9.1-06 and 9.2-06 endorsements (hereinafter respectively "9-06", "9.1-06" and "9.2-06") was changed to replace the word "Easements" in the previous endorsements with the word "Encroachments" in the revised endorsements. Each endorsement also now designates its applicability in its title with the addition of the words "Loan Policy" to the 9-06, "Unimproved Land" to the 9.1-06 and "Improved Land" to the 9.2-06.
Most important are the revisions made to the ALTA 9 endorsement series as a result of Nationwide Life Ins. Co. v. Commonwealth Land Title Ins. Co., 687 F.3d 620 (3d Cir. 2012). See Loan Policy ALTA 9 Endorsement Interpreted, 38 Fund Concept 44 (April, 2006); and ALTA 9 Coverage, 44 Fund Concept 100 (November, 2012). To address the effect of the Nationwide case, the following additional language has been added to the 9-06: The failure to expressly except any matter delineated in paragraphs 1(b)(1), 1(b)(2) or 1(b)(5) of this endorsement constitutes the Company's agreement to indemnify against loss or damage resulting from any matters delineated in paragraphs 1(b)(1), 1(b)(2) or 1(b)(5) only and provides no coverage for any other matters set forth in the covenants, conditions and restrictions. The same language was added to the 9.1-06 and 9.2-06 with slight variation as to damages and references to relevant paragraphs.
Additionally, the following sentence was added to the beginning of all three of the ALTA 9 endorsements: The insurance provided by this endorsement is subject to the Exclusions from Coverage, the Exceptions from Coverage contained in Schedule B, and the Conditions in the policy.
As was the case with the old ALTA 9 endorsements and the newly revised ALTA 9 endorsements, Fund Members must specifically except on Schedule B any provisions which establish or provide for the following matters which are enumerated in paragraphs 1(b)(2) of the 9-06 and/or 1(b) of the 9.1-06 and 9.2-06: easements on the land, liens for liquidated damages, a private charge or assessment, an option to purchase, a right of first refusal, prior approval of a future purchaser or occupant, right of reentry and/or the possibility of reverter or a right of forfeiture because of violations on the land of any enforceable covenants, conditions or restrictions. Fund Members should direct any questions, issues or concerns to Fund Underwriting Counsel.
ALTA ENDORSEMENT 10-06 ASSIGNMENT OF MORTGAGE
The most important change to the ALTA 10-06 concerns the addition of the creditor's rights exception which was absent from the prior version. Previously, a Form E Endorsement had to be issued in conjunction with the 10-06 in order to add the creditor's rights exception. In addition to formatting changes, the endorsement has been expanded to include the possibility of the assignment of a digital document.
ALTA ENDORSEMENT 14 SERIES: FUTURE ADVANCES
The ALTA 14-06 Future Advance - Priority, 14.2-06 Future Advance – Letter of Credit and 14.3-06 Future Advance – Reverse Mortgage (hereinafter respectively "14-06", "14.2-06", "14.3-06") have been revised to exclude from coverage advances made subsequent to the twenty year period set forth in Sec. 697.04, F.S., and as to the 14-06 and 14.3-06, advances made after notice has been recorded in the Public Records limiting the amount that may be advanced. However, in the case of the 14.03-06, such exclusions from coverage include a carve-out for "home equity conversion mortgages" (reverse mortgages) and second mortgages held by HUD under the National Housing Act.
ADDITIONAL REVISIONS TO ALTA FORMS
The MF6 Loan Policy and SF6 Short Form Residential Loan Policy One-To-Four Family have been revised to change the title of the 9-06 wherever referenced and update revision dates where appropriate to 5/14.
The Florida Assignment of Mortgage Endorsement ("AME") and Florida Form 9.1 Endorsement ("FF9.1") have been retired and replaced with the revised ALTA 10 Endorsement and 9.1-06 discussed above.
Finally, the USA Policy, formally known as the ALTA U.S. Policy, which is used for insuring certain governmental entities and only available upon special request, was amended to add a creditor's rights exception.
CONCLUSION
Fund Members should discontinue use of the ALTA 9.3 and 9.5, AME and FF9.1, and destroy any such forms in his/her possession. Members should begin using the new revised endorsements and forms immediately. The revised endorsements and forms set forth a revision date of 5/14. The revised endorsements and Schedule A of the MF6 are available on The Fund's website at the Hyperlinks set forth below and will be incorporated into upcoming versions of DoubleTime. The Standard Commitment Clauses will also be revised with the next annual revision, but until then members should be aware of the need to modify any references in commitment clauses that refer to endorsements that are no longer in use. Any questions or issues concerning any of the above revisions should be directed to Fund Underwriting Counsel.
TO ACCESS SCHEDULE A OF THE MF6:
https://www.thefund.com/TheFund/media/PDFs/MF6A.pdf
TO ACCESS THE REVISED ENDORSEMENTS:
https://www.thefund.com/TheFund/media/PDFs/ALTA9-06.pdf
https://www.thefund.com/TheFund/media/PDFs/ALTA9-1-06.pdf
https://www.thefund.com/TheFund/media/PDFs/ALTA9-2-06.pdf
https://www.thefund.com/TheFund/media/PDFs/ALTA10-06.pdf
https://www.thefund.com/TheFund/media/PDFs/ALTA14-06.pdf
https://www.thefund.com/TheFund/media/PDFs/ALTA14-2-06.pdf
https://www.thefund.com/TheFund/media/PDFs/ALTA14-3-06.pdf
** This Alert should be kept as a permanent part of your records to assist in your compliance with the requirements contained herein. **
Please provide a copy of this Alert to your staff so they can read it and become aware of its contents.
Should you have any questions please call The Fund's Underwriting Department at
800-432-9594 or send an E-mail to: underwriting@thefund.com.