STG Doing Business Endorsement Guideline 1
Explanation:This endorsement is only applicable in connection with the issuance of a Loan Policy. The ALTA Loan Policy excludes unenforceability of the lien of the insured mortgage by reason of failure or inability of the insured to qualify to do business. The endorsement provides insurance against loss by reason of unenforceability of the lien due to failure to qualify to do business. We generally prefer to issue a modified endorsement excepting to the effect of other business transactions or offices. This limit is implicit in most endorsements. This endorsement is not available in some states, due to the lack of a clear exemption of loans.
Underwriting Requirements:(1) We may issue an endorsement insuring against loss by reason of violation at Date of Policy of doing business laws if we verify that the insured is qualified in the relevant state.
(2) We may issue the endorsement to a specific named insured if we are furnished with the following:
(a) Confirmation that (a) the loan to the mortgagor will not take place in the state where the land is located (including negotiation, issuance of the lender's loan Commitment, execution of documents, closing of the transaction, disbursement of loan proceeds and repayment of loan), (b) no prior loans have been made in the state by the lender, (c) no real estate in the state is or has been owned by the lender, (d) no prior business by the lender has occurred in the state, and (e) no office of the lender exists in this state, or;
(b) An attorney's opinion addressed to Stewart stating that the making of the loan does not violate the doing business laws of the state where the land is located and reciting the specific statutory exemption of the loan transaction.
(3) The first endorsement should always name a specific party and not use the generic phrase "the insured" and should not cover violations subsequent to date of Policy.
(4) We may issue a modified endorsement which refers to the specific statutory exemption (where applicable) and which excepts to the effect of other transactions.
(5) We may issue an endorsement which is based on specific exemption of loan transactions.
(6) A Senior Underwriter must approve issuance of the 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):