CLTA Impairment of Lien by Subordination Agreement Endorsement Guideline 111.2

Explanation:

This endorsement provides an insured lender with assurance against loss by reason of any impairment of their lien as a result of the execution of the subordination agreement subordinating the lender's lien to another lien except to the extent of such subordination.

Underwriting Requirements:

(1) The issuance of this endorsement requires a full title search.
(2) If the title search reveals either of the following items, underwriting personnel at Stewart Title Guaranty must be consulted:
(a) A lender subordinates his lien to some other interest such as an easement, lease, or lien which only affects a portion of the land secured by the insured deed of trust or mortgage, without reasonable consideration for the subordination. The lenders right to enforce the lien on the balance of the obligation against the remaining land may be challenged; or
(b) Circuitry of the lien situation (i.e., A has first lien deed of trust or mortgage; B has a lease subordinate to A's deed of trust or mortgage but prior to a subsequent deed of trust or mortgage to C. If A subordinates his deed of trust or mortgage to C's deed of trust or mortgage there is no satisfactory rule of law as to the priority relationship between A's deed of trust or mortgage and B's lease).