Bulletin: MU2016006

Dear Associates:

We previously advised you of the adoption by the American Land Title Association (ALTA) of the following forms: 

ALTA Expanded Coverage Residential Loan Policy - Current Assessments (04-02-15); 

ALTA Short Form Expanded Coverage Residential Loan Policy - Current Assessments (04-02-15); 

ALTA Expanded Coverage Residential Loan Policy - Assessments Priority (04-02-15); and 

ALTA Short Form Expanded Coverage Residential Loan Policy - Assessments Priority (04-02-15).

These policies replace all prior versions of the ALTA Expanded Coverage Residential Loan Policy and the ALTA Short Form Expanded Coverage Residential Loan Policy. We will advise you by separate bulletins when the applicable policy(ies) are available in your state. You should always use the most current version of any ALTA form, if it is available.

Similarities Among the ALTA Expanded Coverage Residential Loan Policies (04-02-15)

The above loan polices are similar to each other in many respects. All are based on the coverage provided to an owner in the ALTA Homeowner's Policy of Title Insurance. All four policies include the automatic incorporation of several ALTA endorsements. They also provide several coverages in addition to the Covered Risks contained in the ALTA Loan Policy 2006. 

Differences Between the ALTA Expanded Coverage Residential Loan Policies (04-02-15)

These policies differ with respect to their coverage regarding the priority of the lien of the Insured Mortgage in relation to the priority of a condominium association's or homeowners association's lien for future unpaid charges and assessments. 

The prior version of the ALTA Expanded Coverage Residential Loan Policy contained options to incorporate different versions of the ALTA Condominium Endorsements (ALTA Endorsement 4-06 or ALTA 4.1-06) and ALTA Planned Unit Development Endorsements (ALTA Endorsement 5-06 or 5.1-06). These endorsements provide different coverage relating to the lien priority of the Insured Mortgage in relation to an association's lien for future unpaid charges and assessments. The most recent versions of the ALTA Expanded Coverage Residential Loan Policies (04-02-15) each incorporate only one version of the ALTA Condominium Endorsement and one version of the ALTA Planned Unit Development Endorsement, as applicable. This tailors the policy to the jurisdiction, and reduces the potential for error. 

ALTA Endorsement 4-06 (Condominium) and ALTA Endorsement 5-06 (Planned Unit Development) insure against loss or damage if the association's lien for charges and assessments is superior to the lien of the Insured Mortgage. ALTA Endorsement 4-06 (Condominium) and ALTA Endorsement 5-06 (Planned Unit Development) may be used only on policies where the Insured Mortgage has priority over the condominium association's or homeowners association's lien for future unpaid charges and assessments. In contrast, ALTA Endorsement 4.1-06 (Condominium) and ALTA Endorsement 5.1-06 (Planned Unit Development) only insure against loss or damage if any charges or assessments of the association are due and unpaid at Date of Policy. ALTA Endorsement 4.1-06 (Condominium) and ALTA Endorsement 5.1-06 (Planned Unit Development) must be used in certain states, and may be used on all policies provided that all condominium association and homeowners association charges and assessments, if applicable, are paid to date.

ALTA Expanded Coverage Residential Loan Policy - Current Assessments (04-02-15) includes the automatic incorporation of the following additional endorsements: 

* ALTA Endorsement 4.1-06 (Condominium), if a condominium unit is referred to in the description of the Land; 

* ALTA Endorsement 5.1-06 (Planned Unit Development); 

* ALTA Endorsement 9.10-06 (Restrictions, Encroachments, Minerals-Current Violations-Loan Policy). 

By incorporation of the above endorsements, ALTA Expanded Coverage Residential Loan Policy - Current Assessments (04-02-15) only insures against loss or damage if an association's charges and assessments are due and unpaid at Date of Policy. ALTA Expanded Coverage Residential Loan Policy - Current Assessments (04-02-15) is the preferred policy form. It may be issued in any state if it is available in the state, provided all association charges and assessments are paid to date. In some jurisdictions, state law determines the priority of the mortgage versus the association's lien, and ALTA Expanded Coverage Residential Loan Policy - Current Assessments (04-02-15) may be the only form that may be used, if it is available. Click here to view a list of states where the ALTA Expanded Coverage Residential Loan Policy - Current Assessments (04-02-15) must be issued if it is available in the state. (See Requirement 17). Please note the conditions relating to such issuance.  

ALTA Expanded Coverage Residential Loan Policy - Assessments Priority (04-02-15) includes the automatic incorporation of the following additional endorsements: 

* ALTA Endorsement 4-06 (Condominium), if a condominium unit is referred to in the description of the Land; 

* ALTA Endorsement 5-06 (Planned Unit Development); 

* ALTA Endorsement 9-06 (Restrictions, Encroachments, Minerals - Loan Policy). 

By incorporation of the above endorsements, ALTA Expanded Coverage Residential Loan Policy -Assessments Priority (04-02-15) insures against loss or damage if an association's lien for charges and assessments has priority over the insured mortgage. Click here to view a list of states where the ALTA Expanded Coverage Residential Loan Policy - Assessments Priority (04-02-15) may be issued if it is available in the state. (See Requirement 17). Please note the conditions relating to such issuance. 

Short Form Expanded Coverage Residential Loan Policies (04-02-15) 

ALTA also adopted Short Form versions of the ALTA Expanded Coverage Residential Loan Policy - Current Assessments (04-02-15) and the ALTA Expanded Coverage Residential Loan Policy - Assessments Priority (04-02-15). 

You may issue the ALTA Short Form Expanded Coverage Residential Loan Policy - Current Assessments (04-02-15) version or Assessments Priority (04-02-15) version if you comply with the requirements for issuance of the ALTA Expanded Coverage Residential Loan Policy - Current Assessments (04-02-15) or Assessments Priority (04-02-15), as applicable. 

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

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