Bulletin: KY000001

Dear Associates:

1.ALTA Form 8.1

The ALTA Form 8.1 Endorsement provides insurance concerning environmental protection liens. Attach the endorsement only to a loan policy and not to an owner policy. Issue this endorsement only if the property is improved residential or if you are insuring a construction loan to add residential improvements. Residential property includes apartment projects, condominiums and single family residences.

Paragraph (a) of the Endorsement insures that there are no superior environmental protection liens recorded in the local records or federal district court clerk's office. You only need to review your local records. Also review any EPA liens that we mail to you. You do not need to check the Federal District Court Clerk's office to issue this endorsement.

To provide the insurance of paragraph (b) of the Endorsement, simply use our form (see referenced form at the end of this bulletin). Fannie Mae authorized us to add an exclusion. This exclusion covers matters that FNMA did not intend to include within the scope of "environmental protection liens." These matters included nuisance statutes, weedcutting liens, and similar matters.

Paragraph (b) excepts to Section 224.877. This statute creates an environmental cleanup.

2.Environmental Notices

The ALTA policies exclude liability because of environmental laws. If a notice of violation is recorded in the real property records, you must except to it in Schedule B. Examples include:

a.Notices of storage, treatment or disposal of hazardous materials on site;

b.Notices of cleanup or decontamination;

c.Notices of lien (such as E.P.A., state, local or private) for cleanup of hazardous materials; or

d.Disclosures or declaration concerning hazardous materials (such as an "Environmental Disclosure Document for Transfer of Real Property" required in some transactions in Indiana).

Do not affirmatively insure against loss because of these notices. Do not remove an environmental cleanup lien as an exception if there was a foreclosure of a prior mortgage or a release of the environmental cleanup lien. The foreclosure may not extinguish the environmental lien. Always except to the environmental cleanup lien and refer to any release of the lien (by saying "to the extent released by") after excepting to the lien.

3.Rate

The filed rate is "determined by the agent depending on the attendant risk.": We generally recommend a $25 charge, if possible.

4.Questions

If you have any questions about the endorsement, please call our underwriting personnel.