Common Endorsements for Lenders

Definition of Endorsement Provision added to an insurance contract altering its scope or application Issues that are not covered or insured over in a standard or extended policy

LTAA 3R, CLTA 100 Protects lender against loss resulting from CC&R’s which can impair the lien of the mortgage Present violations of CC&R’s Encroachments onto or off of the insured land

LTAA 3R, CLTA 100 (cont.) Future violations of CC&R’s occurring prior to foreclosure of the insured deed of trust Damage to improvements due to encroachment onto easements or due to extraction of minerals Final court order requiring removal of any of insured’s improvements from adjoining lands

LTAA 5, CLTA 116 (modified) Provides assurance to lender as to nature of improvements (e.g. vacant, existing residential, etc.) CLTA 116 shows the purported street address − LTAA 5 does not

ALTA 9, CLTA 100.2 Much the same as the LTAA 3R, but adds coverage as to Violation of set backs Liens and easements created by CC&R’s Environmental liens

ALTA 3, CLTA 123.1: Zoning − Vacant States applicable zoning ordinances and amendments Shows uses allowed under the stated classification Title company requires a zoning letter to issue this endorsement

ALTA 3.1, CLTA 123.2: Zoning − Improved Same as the ALTA 3 plus Covers loss resulting from a court order prohibiting use or forcing removal or alteration of improvements Title company requires a zoning letter to issue this endorsement

CLTA 103.7: Access, Land Abuts Street Insures that property abuts or has access to a specified physically open street

CLTA 116.1: Survey Guarantees that insured property is exactly same property as described on specified survey Eliminates risk that survey inadvertently describes wrong property

AZ Form 226, 227, 228: Patent Insures against loss resulting from the exercise of rights under the patent

CLTA 103.5: Water Insures against damage to existing improvements due to the extraction of water through the surface of the land

ALTA 5, CLTA 115.2: PUD Insures lender that mortgage has priority over HOA liens Covers against loss resulting from violation of CC&R’s and certain encroachments

ALTA 6, CLTA 11.5: Variable Rate Insures lender against the invalidity, unenforceability or loss of priority of the insured mortgage as a result of changes in interest rate This endorsement may help avoid having to do a modification later

ALTA 8.1, CLTA 110.9: Environmental Insures lender against any loss or damage sustained by reason of loss of priority of the insured mortgage to any environmental protection lien Recorded at the recorder’s office Filed in the records for the clerk of the US District Court Provided for by Arizona statute Note: ALTA 8.1 (modified) & CLTA 110.9 (modified) are for non-residential properties

AZ Form 211.1, CLTA 110.1: Modified Creditor’s Rights Removes the creditor’s rights exclusion from the policy