Bulletin: KY2012001

Dear Associates:

Stewart Title Guaranty Company has recently filed the following new (or newer versions of) American Land Title Association (ALTA) forms for use in Kentucky: 

POLICIES 

The following are newer versions of existing policies: 

ALTA Homeowner’s Policy of Title Insurance (02/03/10)
The ALTA Homeowner’s Policy of Title Insurance (02/03/10) is designed to incorporate the changes of the 2006 Owner’s Policy and improve the title insurance coverage given to the insured. The only changes in the 2010 Policy include:  

• The expansion of the Continuation of Coverage provision by adding provision b.5 to the policy.
• The inclusion of a creditor’s rights exclusion (no.7) that is consistent with the Covered Risks.
• The new definition for Estate Planning Entity was added to the definition section.

ALTA Expanded Coverage Residential Loan Policy for a One-To-Four Family Residence (7/26/10), and

ALTA Short Form Expanded Coverage Residential Loan Policy (7/26/10)
The ALTA Expanded Coverage Residential Loan Policy For a One-To Four Family Residence (7/26/10) is designed to incorporate the changes of the 2006 Loan Policy and improve the title insurance coverage given to the insured. The only changes in the policy include: 

• The inclusion of a creditor’s rights exclusion (no. 9) that is consistent with the Covered Risks
• The change in Section 8(a)(iii) language to be more consistent to the existing ALTA Loan Policy of 6/17/06 

ENDORSEMENTS 

The following are newly adopted endorsement forms: 

ALTA Endorsement 11.1-06 Mortgage Modification with Subordination
This endorsement is designed for issuance when an intervening lien is subordinated by agreement to the insured mortgage in connection with the modification of the insured mortgage.  This form is similar to the ALTA Endorsement 11-06 which is already available in Kentucky. 

ALTA Endorsement 29-06 Interest Rate Swap Endorsement-Direct Obligation
This new endorsement insures the validity, priority, and enforceability of the lien of the Insured Mortgage as security for the repayment of the Swap Obligation. This endorsement will only be issued for Commercial transactions. 

ALTA Endorsement 29.1-06 Interest Rate Swap Endorsement-Additional Interest
This new endorsement insures the validity, priority, and enforceability of the lien of the Insured Mortgage as security for the repayment of the Swap Obligation that is considered additional interest. This endorsement will only be issued for Commercial transactions. 

ALTA Endorsement 29.2-06 Interest Rate Swap Endorsement-Direct Obligation-Defined Amount
This endorsement insures against loss or damage, not to exceed the Additional Amount of Insurance, by reason of the invalidity, unenforceability or lack of priority of the lien of the Insured Mortgage as security for the repayment of the Swap Obligation at the Date of the Endorsement. 

ALTA Endorsement 29.3-06 Interest Rate Swap Endorsement-Additional Interest-Defined Amount
This endorsement insures against loss or damage, not to exceed the Additional Amount of Insurance, by reason of the invalidity, unenforceability or lack of priority of the lien of the Insured Mortgage as security for the repayment of the Additional Interest at Date of Endorsement. 

ALTA Endorsement 30-06 One To Four Family Shared Appreciation Mortgage
This new endorsement may be used in connection with loan workouts or other finance transactions where the mortgage could secure payment of a portion of the appreciation in value of the land. The endorsement is designed for issuance on mortgages covering one-to-four family residences. 

ALTA Endorsement 31-06 Severable Improvements
This new endorsement insures against covered losses with respect to property affixed to the land that does not constitute real property. The endorsement applies to commercial properties and insures not only specified loss resulting in the reduction in value of the insured’s interest in any severable improvements but also stated cost actually incurred in connection with the removal of any severable improvement. 

ALTA Endorsement 32-06 Construction Loan-Loss of Priority
This new endorsement provides stated insurance with respect to the validity or priority of the lien of the insured mortgage as security for each construction loan advance made on or before the date of coverage. 

ALTA Endorsement 32.1-06 Construction Loan-Loss of Priority-Direct Payment
This new endorsement provides stated insurance with respect to the validity or priority of the lien of the insured mortgage as security for each construction loan advance made on or before the date of coverage. 

ALTA Endorsement 33-06 Disbursement
This new endorsement provides for a change to the date of coverage, but not the date of policy. This endorsement does not serve to change the dates on any endorsements and/or extended coverage.  

ALTA Endorsement 34-06 Identified Risk Coverage
This endorsement insures against loss or damage sustained by the Insured by reason of: (a.) A final order or decree enforcing the Identified Risk in favor of an adverse party; or (b.) The release of a prospective purchaser or lessee of the Title or lender on the Title from the obligation to purchase, lease, or lend as a result of the Identified Risk, but only if (i.) there is a contractual condition requiring the delivery of marketable title, and (ii.) neither the Company nor any other title insurance company is willing to insure over the Identified Risk with the same conditions as in this endorsement.

In addition to the above new endorsements, ALTA has also adopted newer versions of existing ALTA endorsements, which have now been filed for use in Kentucky.  These endorsements are 3.1-06 (Zoning – Completed Structure), 4-06 (Condominium), 5-06 (Planned Unit Development), 10-06 (Assignment), 10.1-06 (Assignment and Date Down), 13-06 and 13.1-06 (Leasehold), 14-06, 14.1-06, 14.2-06, and 14.3-06 (Future Advances), and 28-06 (Easement – Damage or Enforced Removal). 

If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.

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