STG Home Equity Policy 1994

FOR REFERENCE ONLY; THIS FORM IS NO LONGER APPROVED FOR USE

This form should not be used if a comparable ALTA version is available. If a comparable ALTA version is available, the most current version of the ALTA form available in each state should be used, unless approved by a Stewart underwriter.

NOT FOR USE ON FIRST MORTGAGES

STEWART TITLE GUARANTY COMPANY

HOME EQUITY POLICY

SUBJECT TO THE CONDITIONS AND STIPULATIONS HEREOF, STEWART TITLE GUARANTY COMPANY, a Texas corporation, herein called the Company, insures the insured, as of Date of Policy shown in Schedule A, against loss or damage, not exceeding the amount of insurance stated in Schedule A, sustained or incurred by said insured by reason of any incorrectness of the assurances set forth in Schedule A.

In Witness Whereof, STEWART TITLE GUARANTY COMPANY has caused this policy to be signed and sealed by its duly authorized officers as of Date of Policy shown in Schedule A.

CONDITIONS AND STIPULATIONS

1. Definition of Terms

The following terms when used in this policy mean:

(a) "insured": The insured named in Schedule A.

(b) "insured claimant": an insured claiming loss or damage hereunder.

(c) "loss or damage": the out of pocket loss suffered by the insured in reliance upon the assurances of this policy.

(d) "knowledge": actual knowledge, not constructive knowledge or notice which may be imputed to an insured by reason of any public records.

(e) "land": the land described, specifically or by reference in Schedule A, and improvements affixed thereto which by law constitute real property.

(f) "mortgage": mortgage, deed of trust, trust deed, or other security instrument.

(g) "statutory monetary liens": liens created by operation of law and do not include easements, Covenants, Conditions & Restrictions (CC&Rs), or monetary obligations created thereunder.

2. Notice of Claim to Be Given by an Insured Claimant

The Insured shall notify the Company promptly in writing in case knowledge shall come to an Insured hereunder of any claim for which the Company may be liable by virtue of this policy. If such prompt notice shall not be given to the Company, then as to such insured all liability of the Company shall cease and terminate in regard to the matter or matters for which prompt notice is required, provided, however, that failure to notify shall in no case prejudice the rights of any insured under this policy unless the Company shall be prejudiced by such failure and then only to the extent of such prejudice.

3. Proof of Loss Damage-Limitation of Action

In addition to the notices required under Paragraph 2 of these Conditions and Stipulations, a proof of loss or damage, signed and sworn to by the insured claimant shall be furnished to the Company within 90 days after the insured claimant shall ascertain or determine the facts giving rise to such loss or damage. Such proof of loss or damage shall describe the matter insured against by this policy which constitutes the basis of loss or damage, and when appropriate, state the basis of calculating the amount of such loss or damage.

Should such proof of loss or damage fail to state facts sufficient to enable the Company to determine its liability hereunder, insured claimant, at the written request of the Company, shall furnish such additional information as may reasonably be necessary to make such determination.

No right of action shall accrue to insured claimant until 30 days after such proof of loss or damage shall have been furnished.

Failure to furnish such proof of loss or damage shall terminate any liability of the Company under this policy as to such loss or damage.

4. Option to Pay or Otherwise Settle Claims

The Company shall have the option to pay or otherwise settle for or in the name of an insured all liability and obligations of the Company hereunder by paying or tendering payment of the amount of loss or damage or the amount of insurance under this policy.

5. Determination and Payment of Loss

(a) The liability of the Company under this policy shall in no case exceed the least of:

(i) the actual loss of the insured claimant because of reliance on the assurances herein set forth; or

(ii) the amount of insurance stated in Schedule A.

(b) When the amount of loss or damage has been definitely fixed in accordance with the conditions of this policy, the loss or damage shall be payable within 30 days thereafter.

6. Limitations of Liability

No claim shall arise or be maintainable under this policy (a) if the Company, after having received notice of an alleged lien or mortgage insured against hereunder, by litigation or otherwise, removes such lien or mortgage within a reasonable time after receipt of such notice; (b) in the event of litigation, until there has been a final determination by a court of competent jurisdiction, and dispositions of all appeals therefrom, adverse to the assurance of this policy; or (c) for liability voluntarily admitted or assumed by an insured without prior written consent of the Company.

7. Reduction of Insurance; Termination of Liability

All payments under this policy, shall reduce the amount of the insurance pro tanto.

8. Subrogation Upon Payment or Settlement

Whenever the Company shall have paid or settled a claim under this policy, all right of subrogation shall vest in the Company unaffected by any act of the insured claimant. The Company shall be subrogated to and be entitled to all rights and remedies which such insured claimant would have had against any person or property in respect to such claim had this policy not been issued, and the Company is hereby authorized and empowered to use, compromise or settle in its name or in the name of the insured to the full extent of the loss sustained by the Company. If requested, the insured shall execute any and all documents to evidence the within subrogation. If the payment does not cover the loss of such insured claimant, the Company shall be subrogated to such rights and remedies in the proportion which said payment bears to the amount of said loss. If loss should result from any act of such insured claimant, such act shall not void this policy, but the Company, in that event, shall as to such insured claimant be required to pay only that part of any losses insured against hereunder which shall exceed the amount, if any, lost to the Company by reason of the impairment to the right of subrogation.

9. Liability Limited to this Policy

This instrument together with all endorsements and other instruments, if any, attached hereto by the Company is the entire policy and contract between the insured and the Company.

Any claim of loss or damage, whether or not based on negligence, or any action asserting such claim, shall be restricted to the provisions and conditions and stipulations of this policy.

No amendment of or endorsement to this policy can be made except by writing endorsed hereon or attached hereto signed by either the President, a Vice President, the Secretary, an Assistant Secretary, or validating officer or authorized signatory of the Company.

No payment shall be made without producing this policy for endorsement of such payment unless the policy be lost or destroyed, in which case, proof of such loss or destruction shall be furnished to the satisfaction of the Company.

10. Arbitration

Unless prohibited by applicable law, either the Company or the Insured may demand arbitration pursuant to the Title Insurance Arbitration Rules of the American Arbitration Association. Arbitrable matters may include, but are not limited to, any controversy or claim between the Company and the Insured arising out of or relating to this policy, any service of the Company in connection with its issuance or the breach of a policy provision or other obligation. All arbitrable matters when the Amount of Insurance is $1,000,000 or less shall be arbitrated at the option of either the Company or the Insured. All arbitrable matters when the Amount of Insurance is in excess of $1,000,000 shall be arbitrated only when agreed to by both the Company and the Insured. Arbitration pursuant to this policy and under the Rules in effect on the date the demand for arbitration is made or, at the option of the Insured, the Rules in effect at Date of Policy shall be binding upon the parties. The award may include attorneys' fees only if the laws of the state in which the land is located permit a court to award attorneys' fees to a prevailing party. Judgment upon the award rendered by the Arbitrator(s) may be entered in any court having jurisdiction thereof.

The law of the situs of the land shall apply to an arbitration under the Title Insurance Arbitration Rules. A copy of the Rules may be obtained from the Company upon request.

11. Notices, Where Sent

All notices required to be given the Company and any statement in writing required to be furnished the Company shall be addressed to it at the office which issued this policy or to:

Stewart Title Guaranty Company

P.O. Box 2029

Houston, Texas 77252-2029

SCHEDULE A

Home Equity Policy No.:

Our Order No.:

Your Ref. No.:

Date of Policy:

County:

State:

Borrower:

Name of Insured:

Amount of Insurance:

Premium:

THE ASSURANCES REFERRED TO ON THE FACE PAGE ARE:

1. Subject to any conflicts in boundary lines, or discrepancies that would be revealed by a correct survey, the land referred to in this policy is that land located in the County and State shown above, and is referred to as follows:

A. Address according to the County Assessors Tax Roll:

B. The land which is more fully described in "Legal Description" attached hereto as "Exhibit A".

C. The latest available tax information in the office of the assessor of said county discloses the following lien with respect to said land for the Year ______ : A lien as follows:

Parcel No.:

1st Installment:

2nd Installment:

Penalty:

Assessed Valuations:

Land:

Improvements:

Exemptions:

Type:

Amount:

2. The last document as disclosed by the Official Records of the Recorder of said County purporting to convey the fee title to said land is:

Recorded:

Instrument No.:

Documentary Transfer Tax:

Conveyed to:

3. According to the Official Records of the Recorder of said County relative to the land described in Exhibit A there are no outstanding mortgages or outstanding statutory monetary liens purporting to affect said land, other than those set out below under exceptions; provided, however, that no liability is assumed with respect to the identity of any party named or referred to in this schedule, nor with respect to the validity, legal effect or priority of any matter shown as an exception.

See "Exceptions" attached hereto.