The Company requires for its review an unconditional, properly authorized subordination of the mortgage.
Comment: If you rely upon a subordination of mortgage in order to insure priority, you must require that it (1) be specific to the transaction and not an automatic or future subordination; (2) be unconditional (or except to the conditions in Schedule B-Part I); (3) be properly authorized by specific resolution of the Board or Loan Committee of the prior mortgage and be kept in its record (unless the loan is a single family refinance of a superior lien); and (4) be for value (part payoff of the existing loan, construction finance, one of several simultaneous mortgages), unless the policy insures a refinance of a prior lien.
3. Survey to be redated to show completed building before final advance is made on the building loan contract.
4. Certificate of Occupancy and other departmental certificates to be submitted to the company for inspection at or before the time final payment is made on the Building Loan Contract.
5. Pending water charges to be fixed from the date of completion of the building erected on premises shown in Schedule “A.”
6. Pending disbursement clause will appear in policy.
This mortgage was (by agreement dated __/__/__ ) or (by its terms) consolidated with the mortgage (or mortgages) excepted in Schedule “B” of this policy to form a single lien of $_______ and interest.
(a) the terms, covenants, conditions and provisions of the underlying mortgage(s) are excepted;
(b) estoppel certificates are required from the holders of existing mortgages (or exception will be taken against all loss, cost or damage, including attorney’s fees, resulting from a failure to obtain such estoppel);
(c) the proposed loan documentation is to be submitted to the Company for review in advance of closing (additional exceptions will be raised);
(d) the policy will except judgments and liens arising after the date of closing, which may obtain priority over the lien of the insured wraparound mortgage;
(e) the insured wraparound mortgagee must join in the mortgage for the purpose of assuming the obligation to pay the principal and interest of the underlying mortgage(s);
(f) in the event the insured desires the policy be updated by endorsement at the time payments or advances are made, same will be available if permitted at the time of the issuance of such endorsement, and if the charges therefor are paid in accordance with the requirements of the rate manual in effect at the time of such endorsement.
[recite the reason, such as:
assignment from ________ to ________ is missing
there is no assignment into the purported holder
a correction assignment is required]
Note: You may add additional local requirements here. Please consult with our underwriting personnel in preparing appropriate provisions.