Mortgages

Standard Exception Topic

MTG


Mortgages

When analyzing mortgages, you must consider deeds of trust which allow nonjudicial foreclosures.

Exceptions

Standard Exception Subtopic

MTGX01

ALTA

10/12/2011
V 2

Mortgage - Describes Note

A mortgage to secure an original indebtedness of $____________, and any other amounts or obligations secured thereby, recorded.
 Dated: ___________
 Mortgagor: ___________
 Mortgagee/Beneficiary: ____________
Comment: The Company prefers not to use this provision. Instead, the Company prefers to describe a mortgage without statement of any specific debt (e.g. MTG31).

Standard Exception Subtopic

MTGX02

ALTA

10/12/2011
V 2

Mortgage (Performance)

A mortgage to secure the performance of an agreement, or other obligation, recorded ___________.
 Dated: ___________
 Mortgagor: ___________
 Mortgagee/Beneficiary: ____________
Comment: Use this exception if the mortgage secures performance of an agreement or obligation.

Standard Exception Subtopic

MTGX03

ALTA

10/12/2011
V 2

Partially Released

A portion of the Land originally encumbered by mortgage recorded ____________, has been released by document recorded ________________.
Comment: You should describe any partial release of a mortgage to the extent it covers the examined land.

Standard Exception Subtopic

MTGX04

ALTA

10/12/2011
V 2

Assignment

According to the Public Records, the beneficial interest under the mortgage recorded __________, was assigned to __________, by assignment recorded __________.
Comment: You should use this language if the mortgage has been assigned of record.

Standard Exception Subtopic

MTGX05

ALTA

10/12/2011
V 2

Assignment (Mesne)

According to the Public Records, the beneficial interest under the mortgage recorded __________, has been assigned to __________, by mense assignment recorded __________.
Comment: You should use this language if the mortgage has been assigned of record.

Standard Exception Subtopic

MTGX06

ALTA

10/12/2011
V 2

Modification

A document recorded ____________ provides that the mortgage recorded ________, or the obligation secured thereby, has been modified.
Comment: You should use this language in describing a modification. A modification may cause a creditor’s rights issue if the lender receives more beneficial terms; the Policy or applicable endorsement must contain a creditor’s rights exception or exclusion if you insure the modification unless you secure approval by the Company.

Standard Exception Subtopic

MTGX07

ALTA

10/12/2011
V 2

Assignment of Rents

An assignment of _____, recorded _____, as additional security for the payment of the indebtedness secured by the mortgage recorded __________.
Comment: You should use this exception in describing lease or rental assignments. The Company prefers not to add this language in Schedule A when describing the mortgage.

Standard Exception Subtopic

MTGX08

ALTA

10/12/2011
V 2

Not all of Collateral Insured

The Indebtedness secured by the lien of the Insured Mortgage is also secured by property other than the Land.
Comment: If the mortgage secures other land not covered by a Policy, the Company prefers to add this note.

Standard Exception Subtopic

MTGX09

ALTA

10/12/2011
V 2

Subordination

A document recorded ______, provides that the lien or charge of the mortgage recorded _______ was subordinated to the _______, recorded _________.
Comment: You should use this language if a mortgage or other matter is subordinated and contains conditions.

Standard Exception Subtopic

MTGX10

ALTA

10/12/2011
V 2

Policy Insures Subordination

The item recorded ___________ is subordinate to the lien of the Insured Mortgage.
Comment: Use this language if a subordination is unconditional, is specific to the transaction, and is properly authorized.

Standard Exception Subtopic

MTGX11

ALTA

10/12/2011
V 2

Foreclosure Suit

Suit to foreclose the mortgage recorded __________ has commenced, as evidenced by document recorded __________.
Court:
Case No.:
Attorney Information:
 Name:
 Address:
 Phone Number:
Comment: You should use this language to describe a pending suit to foreclose.

See Underwriting Manual


Standard Exception Subtopic

MTGX12

ALTA

10/12/2011
V 2

Insured Assignment Exception

Impairment, loss or failure of title to the beneficial interest transferred to the Insured resulting from:
(A) Lack of possession of the original promissory note, secured by the Insured Mortgage, or
(B) The absence from the original promissory note of a proper endorsement to the insured assignee.
Comment: You should use this language in the Loan Policy or in the assignment endorsement that insures an assignment unless the endorsement (if issued) contains a similar exception, or unless the assignment is from institutional lender to institutional lender on 1-4 family residential property, or unless you verify that the endorsement and delivery occurred.

Standard Exception Subtopic

MTGX13

ALTA

10/12/2011
V 2

Collateral Assignment

According to the Public Records, the beneficial interest, under the mortgage recorded _________________, was collaterally to ______________, by assignment recorded ______________.
Comment: You should use this language if a mortgage is collaterally assigned. You must obtain releases or assignments from both the assignor and assignee. You must not insure a collateral assignment unless you except to the terms of the collateral assignment, you except to the right of the collateral assignor, and the note is delivered to the collateral assignee. In the alternative, the policy may insure the collateral assignor and assignee “as their interests may appear.”

Standard Exception Subtopic

MTGX14

ALTA

10/12/2011
V 2

Additional Advance

A document disclosing an additional advance in the amount of $_____ recorded _______ pursuant to that mortgage recorded _____________.
Comment: Use this provision when an additional advance has been made as evidenced by recorded instrument. However, intervening interests may have priority over the advance.

Standard Exception Subtopic

MTGX15

ALTA

10/12/2011
V 2

Revival of Mortgage

The mortgage, recorded _____________, that was eliminated by the foreclosure of a senior encumbrance, may be revived if the Title is reacquired by the mortgagor or related entity.
Comment: If the mortgagor or a related party (possibly acting for the mortgagor) reacquires title after a foreclosure, all subordinate matters, including subordinate mortgages or deeds of trust, may be deemed to be reinstated. If this situation may occur in the proposed transaction, add this exception.

See Underwriting Manual


Standard Exception Subtopic

MTGX16

ALTA

10/12/2011
V 2

Right of Redemption

Rights of redemption of any owner, lienholder, or other party in interest for ____________ days from the foreclosure sale of the Land dated ____________ and recorded ____________.
Comment: If state law creates a right of redemption, you must add this exception.

Standard Exception Subtopic

MTGX17

ALTA

10/12/2011
V 2

U.S.A. Right of Redemption

The rights, if any, of the United States to redeem the Land within 120 days of the _______ sale held on ________.
Comment: In the event of a judicial foreclosure of a prior lien, the U.S. has a right for 120 days or any longer time allowed by state law.