Bulletin: LA2009005

Dear Associates: 

The Louisiana Department of Insurance has approved the following change to the LATISSO Rate Rule for the endorsements referenced below.  There are no changes to the language content of these endorsements.  The Rate Rule change is effective April 1, 2009, and is as follows: 

ALTA Endorsement 1-06 (Street Assessments)
This endorsement insures the insured mortgagee under a Loan Policy that there are no street improvements under construction or completed which at the date of the issuance of the policy have resulted in a lien that is prior or at a later date may be prior to the lien of the insured mortgage.

Rate:  Five percent (5%) of the Original Rate with a minimum charge of $30 and a maximum charge of $100.

ALTA Endorsement 3-06 (Zoning)
This endorsement may be issued in connection with a Loan Policy or Owner's Policy and insures the insured against an adverse final court decree which prohibits the use or uses specified in the endorsement as allowed under the applicable zoning ordinances.

Rate:  Ten percent (10%) of the Original Rate with a minimum charge of $50

LA ALTA 3C-06 Zoning for Commercial Property
This endorsement may be issued in connection with a Commercial Loan Policy or Owner's Policy and insures the insured against an adverse final court decree which prohibits the use or uses specified in the endorsement as allowed under the applicable zoning ordinances.

Rate:  Fifteen percent (15%) of the Original Rate with a minimum charge of $50

ALTA Endorsement 3.1-06 (Zoning-Completed Structure)
This endorsement provides the insured under a Loan Policy or Owner's Policy the identical coverage as provided in the Zoning Endorsement and, in addition, provides coverage against forced removal or alteration of any structure because of a final court order finding that the applicable zoning ordinances have been violated with respect to:  (i) area, width or depth of land as a building site; (ii) floor space area, (iii) building setback; (iv) height of the structure or (v) number of parking spaces.

Rate:  Ten percent (10%) of the Original Rate with a minimum charge of $50

LA ALTA 3.1C-06 Zoning Completed Structures on Commercial Property
This endorsement provides the insured under a Loan Policy or Owner's Policy the identical coverage as provided in the Zoning Endorsement and, in addition, provides coverage against forced removal or alteration of any structure because of a final court order finding that the applicable zoning ordinances have been violated with respect to:  (i) area, width or depth of land as a building site; (ii) floor space area, (iii) building setback; (iv) height of the structure or (v) number of parking spaces.

Rate:  Fifteen percent (15%) of the Original Rate with a minimum charge of $50

ALTA Endorsement 14-06 (Future Advance-Priority)
This endorsement provides coverage to a lender for loss the lender might sustain in the event a future advance does not have the same priority as the original mortgage as though the advance had been made at the time the mortgage was made. It also covers the lender's loss if each advance does not create a valid and enforceable lien on the title secured by the insured mortgage and the lender's loss sustained resulting from invalidity or unenforceability of the insured mortgage because of re-advance and repayments of the mortgage, lack of an outstanding indebtedness before any advance, and failure of the lender to comply with the requirements of state law to secure the advances.  It also includes ALTA Endorsement 6 coverage.

Rate:  $100

ALTA Endorsement 14.1-06 (Future Advance-Knowledge)
This endorsement is similar to the Form 14 endorsement but is available for loans under which the loan documents provide that the lender has the option of not making an advance for any reason. The coverage is identical to the Form 14 except that there is an additional exclusion from coverage for loss due to intervening liens of which the lender has actual knowledge at the time of making an advance.

Rate:  $100

ALTA Endorsement 14.2-06 (Future Advance-Letter of Credit)
This endorsement is similar to the Form 14 endorsement but is appropriate to be used when the insured mortgage secures repayment of future advances made under a letter of credit, surety agreement (bond), or reimbursement agreement.

Rate:  $100

ALTA Endorsement 14.3-06 (Future Advance-Reverse Mortgage)
This endorsement insures against (1) invalidity or unenforceability of the insured reverse mortgage as security for Advances; (2) lack of priority of the lien of the insured reverse mortgage as security for Advances; and (3) invalidity or unenforceability of the reverse mortgage because of Re-Advances and repayments, lack of outstanding debt before an Advance, and failure to comply with legal requirements for Advances; (4) failure of the insured mortgage to state the term for Advances, (5) failure of the insured reverse mortgage to state the maximum amount secured by the insured mortgage, (6) failure of the mortgagors to be at least 62 years old at Date of Policy, (7) invalidity or unenforceability of the insured mortgage because of adjustment of interest or addition of interest to principal, and (8) loss of priority of the insured mortgage caused by adjustment of interest rates and addition of interest to principal. For purposes of the endorsement, interest includes lawful interest based on net appreciation.

This endorsement contains exclusions from coverage (similar to those in ALTA Endorsement 14 and 14.1): Advances after a bankruptcy, real estate taxes and assessments, federal tax liens filed more than 45 days before the Advance, federal or state environmental protection liens, and usury or consumer credit protection or truth in lending law.

This endorsement is designed for issuance only for a reverse mortgage. Reverse mortgage loans are made to persons, generally one of whom is at least 62. Payments are not due until they die or leave the property. The most common reverse mortgage program is the HUD Home Equity Conversion Mortgage program (HECM) (which contemplates two mortgages-one for the lender and a subordinate mortgage for HUD). Fannie Mae does purchase some separate reverse mortgages under the Home Keeper® program.

Rate:  $100 

The Louisiana Rate and Form Manual has been updated to reflect the change in the Rate Rule for this endorsement.  Please go to www.stgla.com for the updated manual.

If you have questions relating to this bulletin, please contact Louisiana Underwriting Personnel at (800) 209-4675 or Stewart Legal Services.

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