NY TIRSA First Loss Endorsement Guideline 1995

Explanation:

Purpose Of Endorsement:
Where claim(s) due to a loss or a series of losses exceeds 10% of the insurance amount, Company becomes liable to pay on the policy (subject to subrogation rights) without the Company requiring acceleration of the entire mortgage debt or foreclosure against all of the secured properties prior to payment. This coverage is useful where a single policy has been issued insuring a mortgage covering several properties, or a cluster endorsement has been issued. This endorsement is usually issued with a Cluster Endorsement (see the commentaries under Cluster Endorsement for more detail).

Underwriting Requirements:

Requirements For Issuance:
(a) Underwriter approval is required prior to issuance in every case (this is a requirement of the New York State Insurance Department);
(b) Company Counsel must review the loan documentation;
(c) If the transaction, as structured, involves a single loan secured by multiple properties or a consolidation and spreader of loans covering numerous properties, and it would be inequitable for the Company to require the insured lender to call the loan or foreclose and sell other of the properties in the event of claims arising on one or only a few parcels, this endorsement may be appropriate.
Issued With The Following Policies:
Applicable to loan policies only.
Premium:
10% of the unreduced (straight) mortgage premium.