Bulletin: MT000002

Dear Associates:

Numerous questions continue to surface with increasing frequency relating to insuring mortgages at less than their stated amount.

The Company allows the Amount of Insurance to be less than the stated amount of the mortgage only when there is other verifiable collateral not including the land described.

In paragraph 4 of Schedule A of the Policy the following language must appear:

"Notwithstanding the stated amount of the mortgage shown herein, the Company limits its liability hereunder to the Amount of Insurance shown above."

Further, as the last exception of Schedule B - Part I, the following exception should appear:

"In consideration of the issuance of this policy at the request of the Insured for an amount less than the stated amount of the obligation secured by the mortgage referred to in Schedule A, the Insured accepts this policy under the condition that the amount of said policy shall be reduced upon any payment made on said indebtedness by the same proportion that the amount of the policy bears to the stated amount of the obligation actually secured by said mortgage at the Date of Policy and shown in Schedule A - Paragraph 4 hereof."

If you have any questions in this regard, please address them to me.