CLTA Revolving Credit-Increased Credit Limit Endorsement Guideline 108.10
Explanation:This endorsement is used to increase the lender’s policy amount when a Revolving Credit Endorsement is attached to the loan policy.
Underwriting Requirements:(1) In order to issue this endorsement the following requirements must be met:
(a) The original deed of trust or mortgage must contain an "open end" provision which allows for the revolving credit feature. If the deed of trust or mortgage does not contain this provision, a modification of the deed of trust or mortgage must be recorded;
(b) The maker of the note is the record owner of the land secured by the deed of trust or mortgage;
(c) No recorded liens or encumbrances other than as shown on the original policy have intervened since the recording of the original deed of trust or mortgage unless shown on the endorsement (if intervening liens appear, they must be shown on endorsement);
(d) A specific subordination of all junior liens whether prior or subsequent to the original policy;
(e) No reconveyance, modification or subordination of the original deed of trust or mortgage can appear of record;
(f) A tax and assessment search is required and any delinquency disclosed by the search and not shown on the original policy must be shown on the endorsement even though the endorsement does not explicitly include this coverage;
(g) If mechanic's lien coverage was given under the original policy, an inspection must be made to determine that no work has begun prior to the date of the advance; and
(h) The lender should furnish a written statement that an advance has been (or will be) made to a named person in a specified amount evidenced by a promissory note for that amount and that said note recites that it is secured by the deed of trust or mortgage. When this is done, either this endorsement or a new policy can be issued. The person or persons closing the escrow should inquire as to the reason for the advance in order to avoid any possible mechanic's liens or other problems.
(2) An inspection should be made and an inquiry as to whom is in possession of the land should also be made so as to disclose any off record matters such as encroachments, unrecorded easements, etc.
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):