Bulletin: ME2012001

Dear Associates:

The State of Maine Bureau of Insurance has approved for use effective June 8, 2012, the following policies and endorsements:

ALTA Homeowner’s Policy of Title Insurance (0-9540) (02/03/10): The ALTA Homeowner's Policy of Title Insurance Revised 02/03/10 provides more coverage to owners than the 2006 ALTA Owner's Policy. It incorporates many of the new Covered Risks of the 2006 ALTA Owner’s Policy and also includes the Covered Risks in the prior 2003 ALTA Homeowner’s Policy. The ALTA Homeowner's Policy contains 32 insuring clauses (Covered Risks). Version 02/03/10 expands the Continuation of Coverage provision and includes a creditors’ rights exclusion that is consistent with the Covered Risks.

ALTA Expanded Coverage Residential Loan Policy (M-9551) (07/26/10): The ALTA updated the revised Expanded Coverage Residential Loan Policy effective 07/26/10. This Policy is similar to the Homeowner's Policy of Title Insurance (02/03/10). Version 07/26/10 includes a creditors’ rights exclusion that is consistent with the Covered Risks.

ALTA Short Form Expanded Coverage Residential Loan Policy (U-9552) (07/26/10): This policy is the Short Form version of the ALTA Expanded Coverage Residential Loan Policy (07/26/10). It incorporates the insuring provisions, exclusions and conditions of that ALTA policy.  This policy does not expressly incorporate optional endorsements, since those endorsements are automatically incorporated in the ALTA Expanded Coverage Residential Loan Policy (07/26/10), and are therefore automatically incorporated in the ALTA Short Form Expanded Coverage Residential Loan Policy (07/26/10). Schedule B of this policy acknowledges that the exceptions are subject to the insurance of the applicable Covered Risks, but does not otherwise contain affirmative insurance for the exceptions in Schedule B because the affirmative insurance already appears in the ALTA Expanded Coverage Loan Policy Covered Risks (insuring provisions) or in the incorporated endorsements. This policy also provides gap coverage because a Covered Risk of the Expanded Coverage Residential Loan Policy (07/26/10) contains such coverage and is incorporated.

ALTA Endorsement 3.1-06 Zoning-Completed Structure (E-9481) (10/22/09): This endorsement to the Loan or Owner's Policy is designed for issuance on improved property. Like the ALTA Endorsement Form 3, this Endorsement insures (1) the zoning classification, and (2) authorized uses under that classification. In addition, this Endorsement insures against a final court order prohibiting the present structure, and requiring removal or alteration of the present structure, because of violation of the zoning ordinance as to (1) area, width or depth of the land as a building site, (2) floor space area of the structure, (3) setback of the structure, (4) height of the structure or (5) number of parking spaces.

ALTA Endorsement 4-06 Condominium (E-9542) (02/03/10): This endorsement to the Loan Policy insures that the condominium project was created in accordance with state law, that there are no maintenance liens or forfeiture provisions with priority over the lien of the insured mortgage, and that there can be no exercise of a right of first refusal in connection with the current or prior transactions. The endorsement may be attached to the Owner's Policy.

ALTA Endorsement 5-06 Planned Unit Development (E-9543) (02/03/10): This endorsement is issued in conjunction with Loan Policies. It covers planned unit developments which may include "de minimus" PUD's. A Planned Unit Development will consist of a fee simple interest in a townhouse, patio home or single-family residence together with an appurtenant easement over common elements or together with an undivided interest as co-tenant in common elements. The endorsement may be attached to the Owner's Policy.

ALTA Endorsement 10-06 Assignment (E-9544) (02/03/10): This endorsement insures the transferee of the insured mortgage and the secured note that the transfer of mortgage is valid, provided that the note has been properly endorsed and delivered to the transferee, or if the note or notes are transferable records, the insured has "control" of the single authoritative copy of each "transferable record" as these terms are defined by applicable electronic transaction laws. Version 02/03/10 includes a definition of Assignee and a creditors’ rights exception.

ALTA Endorsement 10.1-06 Assignment and Date Down (E-9545) (02/03/10): This endorsement insures the transferee of the insured mortgage and the secured note that the transfer of mortgage is valid, provided that the note has been properly endorsed and delivered to the transferee, or if the note or notes are transferable records, the insured has "control" of the single authoritative copy of each "transferable record" as these terms are defined by applicable electronic transaction laws. Unlike the Form 10-06 endorsement, this endorsement down dates coverage as to taxes and assessments, priority, and notices of federal tax liens or bankruptcies. Version 02/03/10 includes a definition of Assignee and a creditors’ rights exception.

ALTA Endorsement 11.1-06 Mortgage Modification with Subordination (E-9493) (10/22/09): This endorsement insures the lender that (1) the modification of mortgage does not result in invalidity or unenforceability of the insured mortgage; (2) the mortgage, as modified, has priority over defects, liens, and encumbrances, except those in the policy and prior endorsements and except those set forth in this endorsement; and (3) that certain matters, as listed in the endorsement, are subordinate to the lien of the insured mortgage. The endorsement contains a creditors’ rights exception.

ALTA Endorsement 13-06 Leasehold-Owner’s (E-9260) (02/03/11): This endorsement may be used with the ALTA Owner’s Policy 2006 that insures a leasehold estate and the Insured is the Lessee under a lease. This endorsement contains provisions as to the valuation of the estate or interest insured in computing loss or damage under the policy and additional items of loss covered.

ALTA Endorsement 13.1-06 Leasehold-Loan (E-9261) (02/03/11): This endorsement may be used with ALTA Loan Policy 2006 that insures a loan secured by a leasehold estate. This endorsement contains provisions as to the valuation of the estate or interest insured in computing loss or damage under the policy and additional items of loss covered.

ALTA Endorsement 14-06 Future Advance-Priority (E-9262) (02/03/11): This endorsement insures against (1) invalidity or unenforceability of the insured mortgage as security for Advances; (2) lack of priority of the lien of the insured mortgage as security for Advances;  (3) invalidity or unenforceability of the mortgage because of Re-Advances and repayments, lack of outstanding debt before an Advance, and failure to comply with legal requirements for Advances; (4) invalidity or unenforceability of the insured mortgage because of adjustment of interest or addition of interest to principal and (5) loss of priority of the insured mortgage caused by adjustment of interest rates and addition of interest to principal. This endorsement contains exceptions from coverage for advances made after a bankruptcy, real estate taxes and assessments, federal tax liens, federal or state environmental protection liens, usury or consumer credit protection or truth in lending law and mechanics’ liens.

ALTA Endorsement 14-06 Future Advance-Priority without MML (E-9263) (02/03/11): The same endorsement as above, but without the mechanics’ liens exception.

ALTA Endorsement 14.1-06 Future Advance-Knowledge (E-9264) (02/03/11): This endorsement insures against (1) invalidity or unenforceability of the insured mortgage as security for Advances; (2) lack of priority of the lien of the insured mortgage as security for Advances; (3) invalidity or unenforceability of the mortgage because of Re-Advances and repayments, lack of outstanding debt before an Advance, and failure to comply with legal requirements for Advances; (4) invalidity or unenforceability of the insured mortgage because of adjustment of interest or addition of interest to principal and (5) loss of priority of the insured mortgage caused by adjustment of interest rates and addition of interest to principal. This endorsement contains exceptions from coverage for advances made after a bankruptcy, real estate taxes and assessments, federal tax liens, federal or state environmental protection liens, usury or consumer credit protection or truth in lending law and mechanics’ liens. Unlike the ALTA Endorsement 14-06, this endorsement contains an exclusion for lack of priority of any Advance made after the insured has knowledge of a lien, encumbrance or other matter affecting the land.

ALTA Endorsement 14.1-06 Future Advance-Knowledge without MML (E-9265) (02/03/11): The same endorsement as above, but without the mechanics’ liens exception.

ALTA Endorsement 14.2-06 Future Advance-Letter of Credit (E-9266) (02/03/11): This endorsement is designed for insurance of a mortgage securing a letter of credit or letter of credit reimbursement agreement. This endorsement insures against (1) invalidity or unenforceability of the insured mortgage as security for Advances; (2) lack of priority of the lien of the insured mortgage as security for Advances; and (3) invalidity or unenforceability of the mortgage because of Re-Advances and repayments, lack of outstanding debt before an Advance, and failure to comply with legal requirements for Advances. Unlike ALTA Endorsements 14-06 and 14.1-06, this endorsement does not insure with respect to interest rate adjustments. Like ALTA Endorsements 14-06 and 14.1-06, this endorsement contains exceptions from coverage for real estate taxes and assessments, federal or state environmental protection liens, limitations under the Bankruptcy Code on the amount recoverable from the mortgagor’s estate and mechanics’ liens. This endorsement may be issued only on commercial transactions.

ALTA Endorsement 14.2-06 Future Advance-Letter of Credit without MML (E-9267) (02/03/11): The same endorsement as above, but without the mechanic’s liens exception.

ALTA Endorsement 14.3-06 Future Advance-Reverse Mortgage (E-9268) (02/03/11): 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; (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 exceptions from coverage for advances after a bankruptcy, real estate taxes and assessments, federal tax liens, federal or state environmental protection liens, usury or consumer credit protection or truth in lending law and mechanics’ liens.

ALTA Endorsement 14.3-06 Future Advance-Reverse Mortgage without MML (E-9269) (02/03/11): The same endorsement as above, but without the mechanics’ liens exception.

ALTA Endorsement 28-06 Easement-Damage or Enforced Removal (E-9546) (02/03/10): This endorsement provides insurance to a lender against loss in the event that a specific easement holder shall (1) cause damage to a building located on the land at date of policy, or (2) compel the removal or alteration of an existing building located on the land at date of policy. This endorsement is usually requested by a lender when an encroachment over an easement is discovered.

ALTA Endorsement 29-06 Interest Rate Swap Endorsement –Direct Obligation (E-9547) (02/03/10): This endorsement insures against (1) invalidity or unenforceability of the insured mortgage as security for the repayment of the Swap Obligation; (2) lack of priority of the lien of the insured mortgage as security for the repayment of the Swap Obligation. This endorsement contains exceptions from coverage for the master interest rate exchange agreement, creditors' rights, calculation by court and unpaid recording or similar taxes.

ALTA Endorsement 29.1-06 Interest Rate Swap Endorsement-Additional Interest (E-9548) (02/03/10): This endorsement insures against (1) invalidity or unenforceability of the insured mortgage as security for the repayment of the Swap Obligation; (2) lack of priority of the lien of the insured mortgage as security for the repayment of the Swap Obligation. This endorsement contains exceptions from coverage for the master interest rate exchange agreement, creditors' rights, calculation by court and unpaid recording or similar taxes.

ALTA Endorsement 29.2-06 Interest Rate Swap Endorsement-Direct Obligation-Defined Amount (E-9584) (08/01/11): This endorsement defines an additional amount of insurance applicable to the endorsement and insures up to that amount against (1) invalidity or unenforceability of the insured mortgage as security for the repayment of the Swap Obligation; (2) lack of priority of the lien of the insured mortgage as security for the repayment of the Swap Obligation. This endorsement contains exceptions from coverage for the master interest rate exchange agreement, creditors' rights, calculation by court and unpaid recording or similar taxes.

ALTA Endorsement 29.3-06 Interest Rate Swap Endorsement-Additional Interest-Defined Amount (E-9585) (8/1/11): This endorsement defines an additional amount of insurance applicable to the endorsement and insures up to that amount against (1) invalidity or unenforceability of the insured mortgage as security for the repayment of the Additional Interest; (2) lack of priority of the lien of the insured mortgage as security for the repayment of the Additional Interest. This endorsement contains exceptions from coverage for the master interest rate exchange agreement, creditors' rights, calculation by court and unpaid recording or similar taxes.

ALTA Endorsement 30-06 One To Four Family Shared Appreciation Mortgage (E-9553) (07/26/10): This endorsement insures against (1) invalidity or unenforceability of the insured mortgage as security for the indebtedness caused by the provisions for Shared Appreciation; (2) lack of priority of the lien of the insured mortgage as security for the indebtedness caused by the provisions for Shared Appreciation. This endorsement contains exceptions from coverage for usury, consumer credit or truth in lending law, calculation by court, failure to comply with Shared Appreciation laws, creditors' rights, and unpaid recording or similar taxes.

ALTA Endorsement 31-06 Severable Improvements (E-9270) (02/03/11): This endorsement provides that in the event of a loss covered by the policy, the calculation of the loss shall include the diminution in value of the insured’s interest in the Severable Improvement as defined in the endorsement. The endorsement does not cover the attachment, perfection or priority of any security interest in the Severable Improvement, the vesting or ownership of title to or rights in any Severable Improvement, any defect in or lien or encumbrance on the title to any Severable Improvement or the determination of whether any specific property is real or personal in nature. This endorsement applies only to commercial properties.

ALTA Endorsement 32-06 Construction Loan-Loss of Priority (E-9271) (02/03/11): 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 (E-9272) (02/03/11): 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. This version of the endorsement provides coverage against mechanics’ liens only to the extent that direct payment to the mechanic’s lien claimant was made by the Company or by the insured with the Company’s written approval.

ALTA Endorsement 33-06 Disbursement (E-9273) (02/03/11): This new endorsement provides for a change to the Date of Coverage, but not the Date of Policy while taking into account the amount of the current disbursement and aggregate disbursements. This endorsement does not serve to change the dates of any endorsements and/or extended coverage.

ALTA Endorsement 34-06 Identified Risk Coverage (E-9586) (08/01/11): This endorsement allows the company to provide the stated insurance for a particular risk as identified and set forth in the endorsement. The endorsement provides coverage against loss resulting from the enforcement of the identified risk or the release of a prospective purchaser, lender or lessee from the obligation to purchase, lend or lease.

As always, the issuance of these policies and endorsements is subject to and governed by the terms of the Underwriting Agreement and any relevant bulletin(s), form(s) and underwriting manual(s) that you may receive from time to time and as set forth in Stewart Virtual Underwriter.

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

For on-line viewing of this and other bulletins, please log onto www.vuwriter.com.