CLTA Obligatory Advance Endorsement Guideline 122
Explanation:This endorsement provides an ALTA construction lender with assurances concerning obligatory advances made under an insured deed of trust.
Underwriting Requirements:(1) Since liability under this endorsement is limited to the amount of the policy, it should only be issued where the original ALTA policy was written for the full amount of the loan.
(2) Title personnel must require that the lender advise them in writing that an advance of a specified sum has been or is to be made to a named person or entity and that such sum is an advance made under the insured deed of trust or mortgage in accordance with the provisions calling for disbursement set forth in the construction loan agreement between the borrower and the lender.
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):