Endorsements: Form 2046 Instructions

NOTES:

Coverage: The Balloon Mortgage Endorsement insures the lender against 1) the invalidity or unenforceability of the lien of the insured mortgage by reason of the Conditional Right to Refinance and the interest rate change provisions; and 2) the loss of priority due to the exercise of the Conditional Right to Refinance and the extension of the maturity date and any change in the interest rate, provided the conditions of paragraphs 2 and 5 of the balloon rider have been met, and there are no other adverse matters affecting title that arise after the date of policy.

The endorsement specifically excepts from coverage any loss due to usury, any consumer credit protection or truth-in-lending law, or bankruptcy

Procedure: This endorsement may only be issued on a Loan Policy. The endorsement may be  issued if the insured mortgage has attached to it either FNMA Form 3180, the Multi-State Balloon Rider with Conditional Right to Refinance, or FHLMC Form 3191, the Multi-State Balloon Rider with Conditional Right to Refinance.

Questions? Contact an Underwriter.