STG Foreclosure Insurance Policy Guideline 1996

Explanation:

This policy may be issued to a mortgagee, deed of trust beneficiary, deed of trust trustee, HUD foreclosure commissioner, or lender's attorney in contemplation of a judicial or nonjudicial foreclosure of a mortgage or deed of trust. This policy is not issued as a substitute for a regular policy or to insure on a new loan, refinance, or voluntary sale of title. This policy insures that there are no outstanding recorded conveyances or encumbrances affecting the mortgage foreclosure other than those stated in Schedule B. The policy contemplates your normal examination of title. The exceptions are important to the lender in determining whom it must notify of and/or join in a foreclosure action.

Underwriting Requirements:

The policy insures that there have been no recorded conveyances of title to the land subsequent to the mortgage unless excepted in Schedule B. If your examination reflects any conveyances, you must show them and any address shown for the grantee in Schedule B.
The policy insures against recorded leases, contracts, or options to purchase unless excepted in Schedule B. If your examination reveals any outstanding enforceable leases, contracts, or options, you must show them and any address shown for the lessee, purchaser, or optionee in Schedule B.
The policy insures against outstanding recorded liens on the title (subject to the provisions relating to loss), unless excepted in Schedule B. If your examination of the title, taxes, or assessments reveals any outstanding liens, other than the mortgage being foreclosed, you must show them in Schedule B and any address shown for the beneficiary in Schedule B. The mortgage being foreclosed must be shown in paragraph 4 of Schedule A.
The policy insures against any outstanding recorded notice of bankruptcy of the owner of the title unless the notice is excepted in Schedule B. If your examination of the title reveals any bankruptcy of the owner, you must show it in Schedule B.
The policy insures against any recorded assignments of matters excepted in Schedule B (such as assignments of leases or liens), unless the assignment is excepted in Schedule B. If your examination of the title reveals any assignments, you must show them and any address shown for the assignee in Schedule B.
The policy insures against recorded notices of default or foreclosure subsequent to the date of the insured’s mortgage, unless the notice is excepted in Schedule B. In some states, the law requires or authorizes recordation of the notice of default or foreclosure. If your examination of the title reveals a notice of default or foreclosure, you must show the notice and any address for the party in Schedule B.
The policy insures against defects and encumbrances recorded or subordinated (of record) to the foreclosing mortgage after the mortgage was recorded. If your examination reveals other matters recorded subsequent to the mortgage to be foreclosed (such as an easement, subordination, or a prior mortgage), you must show them and any address shown for the party in Schedule B.
The policy insures against loss because of the failure of Schedule B to reflect any specific address shown in an instrument excepted in Schedule B. If you except to a matter in Schedule B, you must show the address, if any, of the grantee, beneficiary, or interested party shown on the instrument.
Schedule A
Paragraph 1 shows the name of the insured. This may be the foreclosing lender, mortgagee, beneficiary, foreclosing lender’s attorney, trustee, or foreclosure commissioner.
Paragraph 2 show the estate or interest in the land (covered by the mortgage).
Paragraph 3 shows the description of all or part of the land covered by the mortgage (i.e., the land requested to be covered by the policy).
Paragraph 4 describes the mortgage which is being foreclosed.
Paragraph 5 shows the owner of the land subsequent to the mortgage. If ownership has not changed since execution of the mortgage, it shows the then owner-mortgagor.
Schedule B
This schedule shows the exceptions to title reflected by the examination and the addresses, if any, of the parties or beneficiaries shown on the instruments disclosed by the exceptions.