James L. Gosdin
Stewart Title Guaranty Company
New ALTA Forms
ALTA Loan Policy (6/17/06)
ALTA Owner’s Policy (6/17/06)
New Commitments – Standard/Plain
Short Form Loan Policy (6/17/06)
Totally New New Endorsements
2006 Policy Endorsements (XX-06)
Revisions to Existing Endorsements
Format of the 2006 ALTA Policy
• Terms of Art
• Covered Risks, Schedules, Exclusions, and
• The Idea: Improve Coverage
Laundry List of Coverage
• Defect in Title
• Invalidity and unenforceability of lien of
Insured Mortgage
Coverage for Electronic Transactions
• Failure to Perform acts necessary to create
an electronic document legally.
• Failure to file, record, or index including
electronic means
• Indebtedness evidenced by electronic
• Insured includes person who has control
Survey Coverage: Covered Risk 2(c)
• 2 (c) “Any encroachment, encumbrance, violation,
variation, or adverse circumstance affecting the
Title that would be disclosed by an accurate and
complete land survey of the Land. The term
“encroachment” includes encroachments of
existing improvements located on the Land onto
adjoining land, and encroachments onto the Land
of existing improvements located on adjoining
Taxes, Taxes, Taxes
• The lien of real estate taxes or assessments
imposed on the Title by a governmental
authority due or payable, but unpaid.
• The lien of any assessment for street
improvements under construction or
completed at Date of Policy (Loan) (ALTA
Endorsement 1)
Gap Coverage
• Any defect in or lien or encumbrance on the Title
or other matter included in Covered Risk that has
been created or attached or has been filed or
recorded in the Public Records subsequent to
Date of Policy and prior to the recording (of the
deed or Insured Mortgage).
• Tax Exclusion for liens after Date of Policy
• Post-Policy Creditors’ Rights Coverage
Governmental Exclusions from
Exclusions Become Covered Risks
• Covered Risk 5: Specific Police Powers and
Notice of Violation or Intent to Enforce by
• Covered Risk 6: Catch-all Notice of Enforcement
of Police Powers
• Covered Risk 7: Eminent Domain Notice of
• Covered Risk 8: Eminent Domain Binding BFP
• Compare Exclusions 1 and 2
Covered Risk 13 Creditors’ Rights in
Loan Policy
• Covers Invalidity, Unenforceability, Lack of Priority and
• Because of Avoidance or Court Order (e.g. Money)
• Fraudulent transfer or voidable preference prior to current
• Preferential transfer of Insured Mortgage because of
– failure to timely record Insured Mortgage
– failure of Insured Mortgage to be constructive notice
• Compare Exclusion 6: Creditors’ Rights Exclusion
Covered Risk 9 - Creditors’ Rights in
Owner’s Policy
• Title Being vested other than as stated or being defective
• Because of Avoidance or Court Order (e.g. Money)
• Fraudulent transfer or voidable preference prior to current
• Preferential transfer of Deed because of
– failure to timely record
– failure of Deed to be constructive notice
• Compare Exclusion 4: Creditors’ Rights Exclusion
Lien and Lien Position
• Covered Risk 9: Invalidity or Unenforceability
• Covered Risk 10: Lack of Priority – Contrast 1970
and 1992
• Covered Risk 11(a): Lack of Priority over MMLs
– Same Underwriting
• Covered Risk 11(b): (New) Lien for Assessments
for Street Improvements Under Construction or
Completed – ALTA Endorsement 1
Schedule A Changes
Title Insurer name and address
Loan No.
Address Reference
Optional 6: box selection of endorsements –
Can issue with, without, with others or with
Exciting Changes in Conditions
• (Section 1) Indebtedness includes post-policy
advances, but not ALTA 14 coverage
• (Section 1) Insured in Loan Policy includes
person who has control of transferable record and
more transferees
• (Section 1) Insured In Owner’s Policy
• (Section 2) Warrantor’s Coverage
• (Section 4) Proof of Loss not an absolute
• (Old Section 7(b)) OTP Co-insurance bye bye
• (Old Section 8) Apportionment bye bye
How Much Will We Owe?
• (Section 8 (b)) 10% Hike
• (Old Section 9(b) of Loan Policy) -Last
Dollar Swan Song
• (Old Section 10 of Loan Policy) Liability
Noncumulative Disappears
• (Section 13/14) Arbitration-Higher Limits,
New Rules
• New ALTA 7.1 , 7.2 Manufactured Housing
• New ALTA 9.3, 9.4, 9.5 (future improvements)
• New ALTA 14.3 Future Advance – Reverse
• New ALTA 22, 22.1 Location
• Revised 9, 9.1, 9.2
• New Endorsements for 2006 Policies: ALTA 1-06
to 22.1-06 (all with xx-06 designation)
New Reinsurance Agreements
• Facultative Reinsurance Agreement
• Tertiary Agreement
• Quaternary Agreement
Other New Forms
• Revised 1966 Commitment – Designed for
2006 Policies
• Revised Plain Language 1982 Commitment
– Designed for 2006 Policies
• Short Form Loan Policy
James L. Gosdin