NM Condominium Endorsement to Loan Policy Guideline 12
Explanation:This endorsement provides affirmative coverage to lenders loaning on the security of condominium units. There are seven matters covered by the endorsement. Some of the matters would be covered by the policy but are included in the endorsement to facilitate the sale of loans in the secondary market. No specific section of the policy is amended by this endorsement.
Rate: See Regulation 13 NMAC 14.10.14.
Underwriting Requirements:(1) The examiner of the condominium project must verify that it complies with all statutory requirements and that any conditions for creation of the condominium have been met.
(2) The unit must be properly identified in the declaration and on the project map.
(3) The restrictive covenants disclosed by the examination must not contain any forfeiture or reversionary provision (unless they are, by their express terms, subordinate to the lien of the insured mortgage).
(4) There are no existing violations of covenants which affect adjacent units or common elements.
(5) If the condominium creates commercial condominium units, then verify that any restrictions do not prohibit use for commercial purposes.
(6) If the condominium declaration creates a lien for maintenance assessments, all assessments outstanding for the period of time prior to closing must be paid.
(7) The declaration must provide that the assessment lien is subordinate to the lien of the insured mortgage.
(8) Each unit is being carried as a separate tax parcel by the taxing authority.
(9) All taxes for years prior to the time that the units are entitled to separate assessment must be paid.
(10) Do not issue this endorsement if there are any significant encroachment or boundary conflicts.
(11) If any condominium documents affecting the title create a right of first refusal, verify in writing with the proper person or party that the right is waived or ineffective as to the current and prior transactions. Require a waiver or relinquishment.
The underwriting guidelines contained herein have been provided for general reference. The facts, circumstances, and location of the subject property should be considered when determining the issuance of the requested form or endorsement. Please note that all of the forms and endorsements included in this system may not be available in all states. Accordingly, please contact the appropriate Stewart Title Guaranty Company underwriting personnel in order to determine availability.
Compliance with the underwriting guidelines contained herein in no way obligates Stewart Title Guaranty Company to issue any form or endorsement.
This guideline applies to the following form(s):