Bulletin: MU2016001

Date:
April 25, 2016
To:
All Issuing Offices except Texas
RE:
UNDERWRITING - Updated Guidelines for ALTA Endorsement 4-06 and 4.1-06 (Condominium) and ALTA Endorsement 5-06 and 5.1-06 (Planned Unit Development)

Dear Associates:

This Bulletin reminds you that an Insured Mortgage may or may not have priority over a condominium association's or homeowners association's lien for future unpaid charges and assessments.

This Bulletin also reminds you that ALTA Endorsement 4-06 and 4.1-06 (Condominium) provide different coverage regarding the priority of the lien of the Insured Mortgage in relation to the priority of a condominium association's lien for future unpaid charges and assessments. Similarly, ALTA Endorsement 5-06 and 5.1-06 (Planned Unit Development) also provide different coverage regarding the priority of the lien of the Insured Mortgage in relation to the homeowners association's lien for future unpaid charges and assessments.

ALTA Endorsement 4-06 (Condominium) or ALTA Endorsement 5-06 (Planned Unit Development), where available, may be used only on policies where the Insured Mortgage has priority over the condominium association's or homeowners association's lien for future unpaid charges and assessments. ALTA Endorsement 4.1-06 and ALTA Endorsement 5.1-06, where available, may be used on all policies provided that all condominium association and homeowners association charges and assessments are paid to date.

State law may determine the priority of the lien of certain mortgages or deeds of trust in relation to a condominium association's or homeowners association's lien for future unpaid charges and assessments. Where the priority of the Insured Mortgage is not determined by state law, the documentation creating the condominium association or homeowners association, as applicable, must be reviewed to determine whether a condominium association’s lien or a homeowners association’s lien for future unpaid charges and assessments is expressly subordinate to the lien of the Insured Mortgage. 

For additional guidance regarding the issuance of these endorsements, please refer to the following Guidelines, which were recently updated:

Guideline: ALTA Endorsement 4-06 and 4.1-06 (Condominium)

Guideline: ALTA Endorsement 5-06 and 5.1-06 (Planned Unit Development)

The updated Guidelines contain a link to a chart that shows the potentially applicable endorsements by state, if available, as they relate to the priority of an association’s lien for future unpaid charges and assessments. Click here to view the chart.

If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.

For on-line viewing of this and other bulletins, please log onto www.vuwriter.com.

THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER  AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.