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Lender & Loan Endorsements
Lenders use these to make the loan policy match how the loan actually works: rates that move, money advanced over time, and construction draws.
DISCLAIMER: For informational and educational purposes only. Nothing here is legal advice, a title opinion, or a commitment to insure, and no attorney-client relationship is created. No one may rely on this content for any transaction or legal decision. Coverage is governed solely by the terms of an issued policy or commitment, and requirements vary by state and underwriter. Consult your own attorney and underwriter. Views are my own and not those of my employer.
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Variable rates
- ALTA 6: validity and priority of the mortgage as security for interest at a variable rate.
- ALTA 6.2: adds negative amortization, unpaid interest added to principal.
Future advances
- ALTA 14 (Future Advance – Priority): validity, priority and enforceability of the mortgage as security for future advances and re-advances, including zero-balance periods, without a knowledge exception.
- ALTA 14.1 (Knowledge): the same, but excepts loss of priority for advances made after the lender has actual knowledge of intervening matters.
- ALTA 14.2 covers letter-of-credit reimbursement obligations; 14.3 is the reverse-mortgage version.
- State future-advance law still matters. See the 50-State Compare.
Location
- ALTA 22 (Location): an improvement of the stated type at the stated address is located on the land.
Construction loans
- ALTA 32 (Construction Loan): priority over mechanics' liens, but only for charges designated for payment in the documents supporting a construction loan advance disbursed on or before the Date of Coverage.
- ALTA 32.1 covers only direct payment to the claimant by the insurer. ALTA 32.2 covers only the insured's direct payment.
- ALTA 33 (Disbursement): moves the Date of Coverage forward to a later draw date, listing any new matters found.
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