Bulletin: CA2020002

Dear Associates:

Stewart Title Guaranty Company (STG) has created the STG Forbearance Modification Endorsement insuring the lender's priority when only one or more of the following modifications are being made:

1. the maturity date has been extended;
2. the rate of interest has been reduced;
3. earned but unpaid interest has been capitalized;
4. reduced mortgage payments made outside the payment cycle of the loan;
5. the lowest rate of the adjustable loan has been reduced, or
6. the interest rate spread has been increased but the top rate has not been changed.

STG created this endorsement modifying the CLTA 110.5-06 in response to requests where lenders have modified loans and granted a forbearance as a result of the economic conditions created by the 2020 emergency “shelter-in” orders issued to combat the COVID-19 aka novel coronavirus pandemic.

This STG Forbearance Modification Endorsement may be issued without a requirement that the lender’s modification or memorandum be recorded, subject to strict compliance with the following guidelines:

1. The lender’s title policy of insurance insuring the trust deed being modified was underwritten by STG;
2. The title officer reviews a full copy of the loan modification and confirms that the only changes are among those permissible modifications itemized above; and
3. The title officer performs and reviews a full date down of the property and confirms that there are no intervening liens or matters.

If you satisfy the above requirements, the STG Forbearance Modification Endorsement may be issued without further approval from the STG Underwriting Department; the charge for the endorsement shall be 10% of the Applicable Rate based upon the remaining balance of the trust deed being modified; maximum $300. If you are unable to satisfy all the requirements, please consider issuing the CLTA 110.5-06 or contact your STG Underwriter for further discussion.

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

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