ALTA Title Endorsements Endorsements are amendments to your title policy. They modify the coverage provided, often increasing the liability of the Company. These endorsements generally require a premium. Typically, endorsements fall into residential or commercial categories. Certain endorsements are available for on the Loan policy, while others may be issued for both the Loan and Owner's policy. In North Carolina, only endorsements promulgated by the American Land Title Association (ALTA) may be issued on title policies. Currently, there are forty-six of these endorsements, which are set out below. Often attorneys will receive a request from lenders for a CLTA endorsement. CLTA endorsements are used with title policies issued in California only and are not to be used with ALTA policies, which are the title policies used in North Carolina. However, there are many ALTA equivalents to CLTA endorsements. ALTA Endorsement Form 1-06 Street Assessments (6-17-06) Loan policy only. Insures that assessments for street improvements will not gain priority over the insured mortgage. ALTA Endorsement Form 2-06 Truth in Lending (6-17-06) Loan policy only. Insures lender against effects of termination of lien through a valid exercise of the right of rescission. ALTA Endorsement Form 3-06 Zoning Unimproved Land (6- 17-06) Loan or Owner’s policy. Insures the unimproved land meets the applicable zoning provisions. ALTA Endorsement Form 3.1-06 Zoning-Completed Structure (10-22-09) Loan or Owner’s policy. Insures the improved land meets the applicable zoning provisions. ALTA Endorsement Form 4-06 Condominium (2-3-10) For Loan policy only. Insures the condominium is in compliance with applicable law and that no condo assessments have priority over the insured mortgage. ALTA Endorsement Form 4.1-06 Condominium (10-16-08) May be used with Loan or Owner’s policy and with second mortgages. ALTA Endorsement Form 5-06 Planned Unit Development (2-3-10) Loan policy only. Insures against encroachments by the unit, against restrictions providing for a forfeiture or reversion of title and against assessments gaining priority over the insured mortgage. ALTA Endorsement Form 5.1-06 Planned Unit Development (10-16-08) Owner’s policy. ALTA Endorsement Form 6-06 Variable Rate Mortgage (10- 16-08) Loan policy only. Insures against loss of priority of the insured mortgage due to changes in the interest rate. ALTA Endorsement Form 6.2-06 Variable Rate Mortgage - Negative Amortization (10-16-08) For Loan policy only. Insures against loss of priority of the insured mortgage or invalidity of the mortgage due to changes in the interest rate or interest on interest which results in the addition of interest to the unpaid balance. ALTA Endorsement Form 7-06 Manufactured Housing Unit (6-17-06) Loan or Owner’s policy. Insures the manufactured home as a part of the real estate. ALTA Endorsement Form 7.1-06 Manufactured Housing - Conversion: Loan (6-17-06) Loan policy only. Insures the manufactured home is a part of the real estate in situations where no title has been issued to the manufactured home, but the home has been permanently affixed to the real estate. ALTA Endorsement Form 7.2-06 Manufactured Housing - Conversion: Owner's (6-17-06) Owner’s policy version of the 7.1-06 endorsement. ALTA Endorsement Form 8.1-06 Environmental Protection Lien (6-17-06) Loan policy only. Insures no environmental liens have been filed in the public record against the insured residential property. ALTA Endorsement Form 8.2-06 Commercial Environmental Protection Lien (10-16-08) Loan and Owner’s commercial policies. Insures no federal or state environmental liens have been filed in the public record against the insured property. ALTA Endorsement Form 9-06 Restrictions, Encroachments, Minerals (6-17-06) Loan Policy only. Used where CLTA 100 has been requested. Insures against violations of restrictive covenants, encroachments and outstanding mineral interests. ALTA Endorsement Form 9.1-06 Restrictions, Encroachments, Minerals - Owner's Policy: Unimproved Land (6-17-06) Insures against violations of restrictive covenants, encroachments and outstanding mineral interests. ALTA Endorsement Form 9.2-06 Restrictions, Encroachments, Minerals - Owner's Policy: Improved Land (6-17-06) Insures against violations of restrictive covenants, encroachments and outstanding mineral interests regarding improved land. ALTA Endorsement Form 9.3-06 Restrictions, Encroachments, Minerals - Loan Policy (6-17-06) Loan policy only. Used where CLTA 100 is requested. Provides more extensive coverage against outstanding mineral interests than the ALTA 9-06. ALTA Endorsement Form 9.4-06 Restrictions, Encroachments, Minerals - Owner's Policy: Unimproved Land (6-17-06) Owner’s policy version of the ALTA 9.3-06. ALTA Endorsement Form 9.5-06 Restrictions, Encroachments, Minerals - Owner's Policy: Improved Land (6-17-06) Insures against violations of restrictive covenants, encroachments and damage to future improvements caused by development of mineral interests. ALTA Endorsement Form 10-06 Assignment (2-3-10) Loan policy only. Insures the note and mortgage that has been assigned are valid. ALTA Endorsement Form 10.1-06 Assignment And Date Down (2-3-10) Loan policy only. Modifies the effective date of the policy to the date of the assigned instruments. ALTA Endorsement Form 11-06 Mortgage Modification (6- 17-06) Loan policy only. Insures the lender that the mortgage as modified retains its priority and that the modification does not render it invalid. ALTA Endorsement Form 11.1-06 Mortgage Modification with Subordination (10-22-09) Loan policy only. Insures the subordination of the insured mortgage that has been modified. ALTA Endorsement Form 12-06 Aggregation (6-17-06) Loan policy only. Also known as a Tie-In, Spreader or Cluster Endorsement. The endorsement aggregates the amount of coverage from policies in several states relating to a commercial transaction. ALTA Endorsement Form 13-06 Leasehold - Owner's (6-17- 06) This endorsement modifies the Owner’s policy jacket to convert it to a leasehold loan policy. ALTA Endorsement Form 13.1-06 Leasehold - Loan (6-17-06) This endorsement modifies the Loan policy jacket to convert it to a leasehold loan policy. ALTA Endorsement Form 14-06 Future Advance – Priority (10-22-09) Loan policy only. Insures priority of future advances in a mortgage. For use in those states in which advances are granted priority by statute. ALTA Endorsement Form 14.1-06 Future Advance – Knowledge (10-22-09) Loan policy only. Insures priority of future advances in a mortgage with interest rate adjustments. For use in those states in which advances are granted priority by statute. ALTA Endorsement Form 14.2-06 Future Advance - Letter of Credit (2-28-09) Loan policy only. Insures the lack of priority or unenforceability of the lien of the insured mortgage as security for making future advances where the mortgage is secured by a letter of credit. To be issued on commercial transactions only. ALTA Endorsement Form 14.3-06 Future Advance – Reverse Mortgage (10-22-09) Loan policy only. Insures against the invalidity or unenforceability of the lien of the insured Reverse Mortgage. ALTA Endorsement Form 15-06 Non-Imputation - Full Equity Transfer (6-17-06) Loan or Owner’s policy. Insures against knowledge that an incoming partner, director, shareholder or owner might have that could be imputed to the others and create liability. Used in mergers and acquisitions. ALTA Endorsement Form 15.1-06 Non-Imputation - Additional Insured (6-17-06) Loan or Owner’s policy. This endorsement is used when where a title policy has been issued, but a new member is coming in and being added to the coverage by endorsement. The effective date of the policy does not change. ALTA Endorsement Form 15.2-06 Non-Imputation - Partial Equity Transfer (6-17-06) Loan or Owner’s policy. This endorsement is issued where a new owner is buying an equity interest in an entity and a new title policy is being issued and the incoming member will be named as an additional insured under Schedule A. ALTA Endorsement Form 16-06 Mezzanine Financing (6-17- 06) Loan policy only. Given to lenders who make a portion of the loan, but do not secure their interest in real estate, but rather in a portion of the loan payments. ALTA Endorsement Form 17-06 Access and Entry (6-17-06) Loan or Owner’s policy. This endorsement insures that the insured land abuts a named public street as shown on a current survey and that the street is physically open. ALTA Endorsement Form 17.1-06 Indirect Access and Entry (6-17-06) Loan or Owner’s policy. This endorsement insures that the insured easement provides access to a named public street and that the Street is physically opened. ALTA Endorsement Form 17.2-06 Utility Access (10-16-08) Insures against loss of access to named utilities. ALTA Endorsement Form 18-06 Single Tax Parcel (6-17-06) Loan or Owner’s policy. Insures the insured land is being taxed as a single and separate parcel and not as a part of a larger parcel. ALTA Endorsement Form 18.1-06 Multiple Tax Parcel (6-17- 06) Loan or Owner’s policy. Insures against loss or damage if the insured land is taxed as a part of other parcels. ALTA Endorsement Form 19-06 Contiguity - Multiple Parcels (6-17-06) Loan or Owner’s policy. Insures that multiple tracts of land do not have any gaps between their boundaries. ALTA Endorsement Form 19.1-06 Contiguity - Single Parcel (6-17-06) Loan or Owner’s policy. Insures that there are not gaps between the boundaries of the insured land and a tract of uninsured land that is owned by the same owner. ALTA Endorsement Form 20-06 First Loss - Multiple Parcel Transactions (6-17-06) Loan policy only. Changes how losses are measured and allocated where there are more than one tract of land insured under the policy. ALTA Endorsement Form 22-06 Location (6-17-06) Loan or Owner’s policy. Insures a named improvement is located within the boundaries of the insured land. ALTA Endorsement Form 22.1-06 Location and Map (6-17- 06) Loan or Owner’s policy. Insures a named improvement is located within the boundaries of the insured land and that said improvement’s location is shown on the attached survey. ALTA Endorsement Form 23-06 Coinsurance – Single Policy (10-16-08) Issued where two title policies have been issued by two separate insurers. This endorsement incorporates the terms of the policy issued by the co-insurer. ALTA Endorsement Form 24-06 Doing Business (10-16-08) Loan policy only. Insures against the invalidity or unenforceability of the insured mortgage due to the fact that the loan violated doing business laws of the locale where the insured land is located. ALTA Endorsement Form 25-06 Same as Survey (10-16-08) Loan or Owner’s policy. Insures that the description of the insured land under Schedule A is the same as that shown on the survey referenced in the title policy. ALTA Endorsement Form 25.1-06 Same as Portion of Survey (10-16-08) Loan or Owner’s policy. Insures that the description of the insured land under Schedule A is the same as that shown on a part of the survey referenced in the title policy. ALTA Endorsement Form 26-06 Subdivision (10-16-08) Loan or Owner’s policy. Insures that the insured land has been properly platted and subdivided in accordance with applicable local and state laws. ALTA Endorsement Form 27-06 Usury (10-16-08) Loan policy only. Insures against the invalidity or unenforceability of the insured mortgage due to a of usury law. ALTA Endorsement Form 28-06 Easement - Damage or Enforced Removal (2-3-10) Loan policy only. Given where a structure has been built onto an easement. Insures against forced removal of the structure by the easement holder. ALTA Endorsement Form 29-06 Interest Rate Swap Endorsement - Direct Obligation (2-3-10) Loan policy only. Insures against the invalidity, unenforceability or lack of priority of the insured mortgage that was given as security for the repayment of a swap obligation. ALTA Endorsement Form 29.1-06 Interest Rate Swap Endorsement - Additional Interest (2-3-10) Loan policy only. Insures against the invalidity, unenforceability or lack of priority of the insured mortgage that was given as security for the repayment of an interest rate swap obligation. ALTA Endorsement Form 30-06 Shared Appreciation Mortgage (7-26-10) Loan policy only. Insures against the invalidity or unenforceability of the lien or loss of priority of the insured mortgage containing provisions for shared appreciation. ALTA Endorsement 31-06 (Severable Improvements) Adopted 02-03-11 Insures that property attached to the land does not constitute real property due to its character and/or the manner in which it is affixed. ALTA Endorsement 32-06 (Construction Loan - Loss of Priority) Adopted 02-03-1 Deletes Covered Risk 11(a) from the policy. Insures against the invalidity or unenforceability of the lien of the Insured Mortgage or its loss of priority for a construction loan advance that is made on or before the policy date. It does not insure against mechanic’s liens that arise for work done after the effective date of the policy. ALTA Endorsement 32.1-06 (Construction Loan - Loss of Priority - Direct Payment) Adopted 02-03-11 Deletes Covered Risk 11(a) from the policy. Coverage same as 32-06, except that this endorsement also covers against loss of priority caused by unfiled mechanic’s liens but only to the extent that direct payment to the Mechanic's Lien claimant has been made by the Company or the Insured. ALTA Endorsement 33-06 (Disbursement) Adopted 02-03-11 Endorsement brings forward the Date of Coverage, increases the insurance amount based upon the periodic construction disbursements, after each construction loan disbursement is made. ALTA Endorsement 34-06 (Identified Risk Coverage) (08-01- 11) Affirmative coverage from a final court order or decree to enforce an identified risk in favor of an adverse party. ALTA Endorsement 35-06 Minerals and Other Subsurface Substances - Buildings Insures against the forced removal of buildings due to the exercise of mineral rights. ALTA Endorsement 35.1-06 Minerals and Other Subsurface Substances - Improvements Insures against the enforced removal or alteration of any Improvement, resulting from the future exercise of any right existing at Date of Policy to use the surface of the Land for the extraction or development of minerals. ALTA Endorsement 35.2-06 Minerals and Other Subsurface Substances - Described Improvements Same as 35-1-06 except that improvements are itemized and set out on an Exhibit A ALTA Endorsement 35.3-06 Minerals and Other Subsurface Substances - Land Under Development Provides indemnity against enforced removal or alteration of improvements, as defined in the endorsement, located on the land future improvements, as defined in the endorsement, because of the exercise of an existing right to use the surface of the Land for extraction or development of minerals. Project plans must be submitted to First American underwriting counsel for approval. ALTA Endorsement 36-06 Energy Project - Leasehold/Easement - Owner's Only This endorsement provides additional coverage against loss or damage for the insured’s easement interests that are utilized along with leases to create rights in the land for project improvements. ALTA Endorsement 36.1-06 Energy Project - Leasehold/Easement - Loan Lender's version of 36-06. ALTA Endorsement 36.2-06 Energy Project - Leasehold - Owner's This endorsement is identical with the ALTA Endorsement 36-06 with the exception that it deletes the aspects addressing insured easement interests. This endorsement will be used for those transactions in which there are no easement interests being insured. ALTA Endorsement 36.3-06 Energy Project - Leasehold - Loan Lender's version of 36.2-06. ALTA Endorsement 36.4-06 Energy Project - Covenants, Conditions and Restrictions - Land Under Development - Owner's Patterned after the ALTA Endorsement 9.8-06 and tailored to an energy project context, this endorsement provides coverage against loss resulting from violation of Covenants and enforced removal of any “Electrical Facility” or “Severable Improvements.” Project plans must be submitted to First American underwriting counsel for approval. ALTA Endorsement 36.5-06 Energy Project - Covenants, Conditions and Restrictions - Land Under Development - Loan Lender's version of 36.3-06. ALTA Endorsement 36.6-06 Energy Project – Encroachments This endorsement provides coverage against loss or damage as to encroachments, or enforced removal of any encroaching “Electrical Facility” or Severable Improvement existing as of the Date of Policy and those affixed later in the locations identified on a set of defined Plans. Project plans must be submitted to First American underwriting counsel for approval. ALTA Endorsement 36.7-06 Energy Project - Fee Estate - Owner's Policy This endorsement is only available for owner’s policies. This endorsement is intended for use where (1) there is an electricity generating facility located on the Land at Date of Policy or such a facility will be constructed on the Land in the future. ALTA Endorsement 36.8-06 Energy Project - Fee Estate - Loan Policy Lender's version of 36.7-06. This endorsement states how loss or damage will be calculated if the Vestee is Ejected from all or a portion of the Land. ALTA Endorsement 37-06 Assignment of Rents or Leases This endorsement is only available for loan policies. It is intended for use on improved or unimproved commercial or residential property, and provides coverage for loss or damage due to defects in the execution of a specified assignment of leases and rents. ALTA Endorsement 38-06 Mortgage Tax Available for loan policies, this endorsement provides coverage against loss or damage due to invalidity, unenforceability, or lack of priority of the lien of the Insured Mortgage due to the failure to pay recording, registration, or related taxes or mortgage tax due as of when the Insured Mortgage is recorded. ALTA Endorsement 39-06 Policy Authentication This endorsement is available for both owner’s and loan policies and confirms that the Company will not deny coverage solely on the basis that the policy or any endorsement was issued electronically. ALTA Endorsement 40-06 Tax Credit – Owner's Policy This endorsement provides coverage against loss or damage sustained by a “Tax Credit Investor” (as defined in the endorsement) by a reduction in a “Tax Credit” (as defined in the endorsement) that is caused by a matter otherwise insured against by the policy. ALTA Endorsement 41-06 Water - Buildings Coverage is provided against enforced removal or alteration of certain surface improvements due to the exercise by a water rights estate owner to use the surface of the Land to extract water. ALTA Endorsement 41.1-06 Water - Improvements This endorsement provides coverage against enforced removal or alteration of certain improvements due to the exercise by a water rights estate owner to use the surface of the Land to extract water. Improvements covered include walkways and parking areas, but exclude crops, landscaping, lawns, shrubbery or trees. ALTA Endorsement 41.2-06 Water – Described Improvements This endorsement provides coverage against enforced removal or alteration of a specified list of existing improvements identified in the endorsement due to the exercise by a water rights estate owner. ALTA Endorsement 41.3-06 Water – Land Under Development This endorsement covers against enforced removal or alteration of certain existing surface improvements and “Future Improvements” (as defined in the endorsement) due to the exercise by a water rights owner. ALTA Endorsement 42-06 Commercial Lender Group Endorsement - Loan Policy Designed for commercial loan transactions where a group of lending institutions participates in funding the Indebtedness. It covers against loss or damage due to invalidity, unenforceability, or lack of priority of the lien of the Insured Mortgage caused by transfers after Date of Policy of portions of the Indebtedness. ALTA Endorsement 43-06 Anti - Taint This endorsement insures mortgages that secure both a “Term Loan” and a “Revolving Credit Loan (as defined in the endorsement) and the lender requires assurance that the advances and re- advances under the Revolving Credit Loan will not affect the priority of the Insured Mortgage as security for the Term Loan. ALTA Endorsement 44-06 Insured Mortgage Recording This endorsement is applicable in situations where a title policy is provided at the closing with the date of the policy being the date of closing, but the mortgage or deed of trust will be recorded at a later date. ALTA Endorsement 45-06 Pari Passu Mortgage – Loan Policy Coverage is provided for loss or damage sustained by the Insured by reason of (a) the invalidity or unenforceability of the lien of the Insured Mortgage resulting solely from the provision of a Pari Passu Mortgage or Intercreditor Agreement establishing lien priority; or (b) the lack of equal lien priority of the Insured Mortgage to the other Pari Passu Mortgages. ALTA Endorsement 46-06 Option This endorsement provides coverage against loss or damage arising out of certain defects in the execution of the recorded document evidencing an option to acquire the Land described in the policy.