NM Pending Disbursement Down Date Endorsement Guideline 22
The Pending Disbursement Down Date Endorsement (NM 22) may be attached to a Loan or Construction Loan Policy or Foreclosure Guarantee Policy. When a standard Loan Policy (NM 2) is issued to insure a construction loan, the pending disbursements clause referenced below (paragraph 1) should be inserted in the standard Loan Policy and the Pending Disbursement Down Date Endorsement shall be used for all subsequent disbursements. each disbursement of the proceeds of the loan, the title must be continued down to such time for possible liens or objections intervening between the date hereof and the date of such disbursement."
We require the following:
1. A construction lender may be issued a standard Loan Policy in lieu of a Construction Loan Policy upon payment of the premiums for a standard Loan Policy required by 13 NMAC 220.127.116.11. Such standard Loan Policy insuring a construction loan shall contain an additional numbered exception in Schedule B reading as follows:
"Pending disbursement of the full proceeds of the loan secured by the mortgage or deed of trust set forth under Schedule A hereof, this policy insures only to the extent of the amount actually disbursed but increases as each disbursement is made, in good faith, and without knowledge of any defect in, or objections to, the title, up the face amount of the policy. Prior to each disbursement of the proceeds of the loan, the title must be continued down to such time for possible liens or objections intervening between the date hereof and the date of such disbursement."
This clause may not be deleted from the Loan Policy even after all funds have been disbursed.
2. At the time of each disbursement, a title down date shall be performed on the property and a Pending Disbursement Down Date Endorsement may be issued showing any changes in title to the secured property and stating the total amount of the proceeds of the construction loan advanced by the lender at the date the endorsement is issued.
3. The down date (or date down) endorsement premium shall be $25.00 for each endorsement.
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):None