Endorsements: Form 2058-06 Instructions

NOTES:
Coverage: Occasionally, ATG is asked to insure a first and second mortgage given by the borrower to the same lender on the same piece of property on one MPA policy for the total of the face amount of both mortgages. The most compelling reason for not insuring both mortgages on one policy is a possibility that the mortgages may be sold to separate institutions who would each then claim priority as to the other mortgage in a foreclosure setting.

The endorsement deletes the policy provisions regarding priority of the insured mortgage and substitutes a new insuring provision. The endorsement identifies a priority between the two insured mortgages.

Procedure: This endorsement may be issued on Loan Policies only. You may insure two mortgages on a single policy only if all the following requirements are met:

1. Both mortgages must have the same borrower;

2. Both mortgages must have the same lender;

3. Both mortgages must encumber the same piece of property; and

4. The mortgages must state a priority between them, or have a separate subordination agreement.

To insure both mortgages on the same Loan Policy, divide Schedule A Number 3 into two parts and label them "A" and "B." Give the information on the mortgage with the first priority in Part A and the mortgage with the second priority in Part B. Then issue the Multiple Mortgage Endorsement with the policy. The mortgages in Parts A and B are shown on Schedule A because this endorsement refers to the two mortgages as "the lien of the insured mortgage referred to in subparagraph (A)" and "subparagraph (B)."

The endorsement deletes the policy provisions regarding priority of the insured mortgage and substitutes a new insuring provision. The endorsement identifies a priority between the two insured mortgages. If this format is followed, ATG will insure the two mortgages on one policy.

Questions? Contact an Underwriter.