OR Comprehensive Endorsement Guideline 7.4

Explanation:

Provides the ALTA lender with affirmative insurance concerning covenants, conditions and restrictions, encroachments, easements and mineral development.

Underwriting Requirements:

(1) This endorsement should not be used on any:

(a) Loans which are secured by vacant (unimproved) land without the deletions of paragraphs 1a, 2a, 2b, 3, and 4 of the endorsement.

(b) Construction loans. However, after inspection of subject property, the endorsement may be issued for a take out or permanent loan.

(c) This endorsement should not be issued as an attachment to any previously issued loan policy.

(2) Paragraph 1a of the CLTA 100 Endorsement assures the lender that there are no CC&Rs that would cut off, subordinate or otherwise impair the land of the deed of trust or mortgage.
CC&Rs must be reviewed before the endorsement can be issued in order to make certain that no forfeiture or reversion clause provide for a safety clause against the effect of any future violations. Additionally, title personnel must make certain that no assessment loans have priority over the deed of trust or mortgage.

(3) Paragraph 1b of the CLTA 100 Endorsement provides that there are no present violations of CC&Rs.

If a violation of CC&Rs is in effect, this paragraph must be deleted and shown as an exception on Schedule B of the loan policy.

(4) Paragraph 1c of the CLTA 100 Endorsement assures the lender that there are no encroachments of improvements on the subject property onto the adjoining property and no encroachments of improvements on adjoining property onto the subject property. If an encroachment exists, paragraph 1c must be omitted from the CLTA 100 Endorsement or amended to read ".....other than as shown as Exception ___ in Schedule B".

(5) Paragraph 2a of the CLTA 100 Endorsement assures the lender that a future violation of the CC&Rs would not impair or cause the lien of the deed of trust to be defective. In order to ensure against future violations under paragraph 2a of the CLTA 100, a savings clause in the CC&Rs is required.

(6) Paragraph 3a of the CLTA 100 Endorsement provides that existing improvements on subject property that are located or encroach on an easement cannot be damaged by the exercise or maintenance of said easement. Paragraph 3a of the CLTA 100 is to be omitted or amended to read "....other than as shown in the Exception _____ in Schedule B" if an encroachment onto the easement is in existence.

(7) Paragraph 3b of the CLTA 100 Endorsement provides the lender assurance against damage to existing improvements due to the exercise of the right to surface entry for the extraction or development of minerals. Unless the right of surface entry is held by the owner of the land, paragraph 3b of the CLTA 100 Endorsement must be omitted if the legal description excepts mineral rights, or a reservation of mineral rights is shown on Schedule B.

(8) Paragraph 4 of the CLTA 100 Endorsement insures the lender against the forceable removal of any existing improvements on subject property which encroach onto adjoining property. This paragraph is to be deleted if there is an encroachment or amended to read: "...other than as shown in the Exception _____ in Schedule B".

(9) If more than one paragraph is omitted from this endorsement a special limited endorsement should be considered. Please contact the appropriate Stewart Title Guaranty underwriting personnel for instructions.