Mortgage Modifications

EDITOR'S NOTE: See our Underwriting Guidelines (Illinois, Indiana) for the most current information on this topic.

Lenders may occasionally request that you insure a mortgage modification by updating a Mortgagee Policy you issued on the original mortgage. A mortgage modification is a document that seeks to change an original, recorded mortgage. Sometimes lenders will change the terms of the original mortgage substantially in the modification, altering the interest rate, the time period for payments, and/or the amount due. When lenders make these changes, they often are effectively refinancing the loan without releasing the original mortgage and recording a new mortgage.

Underwriting Guidelines and Requirements

To provide insurance to the lender for a mortgage modification, observe the requirements and guidelines, below.


  1. The lender must have an ATG Mortgagee Policy for the mortgage being modified. If not, then write the lender a brand-new commitment and policy, just as you would for any other refinance transaction.

  3. The mortgage modification document must be recorded.

  5. The owners must indicate that they have not had any construction, remodeling, or improvements done to the property since the prior ATG policy.

  7. The title must show no intervening liens between the recordings of the original mortgage and the mortgage modification document; or, if there are liens, the owners must pay them off.

  9. You must calculate ATG's premium for mortgage modifications using the Refi Rates on the Rate Card, plus search and recording fees, as applicable.


  1. Conduct or obtain a new search from the date of the original Mortgagee Policy through the date the mortgage modification document was recorded.

  3. Obtain payoffs for any intervening liens found in the search report.

  5. Obtain a new ALTA Statement (ATG Form 3004), signed by the owners and notarized. If new money is disbursed, have the lender sign the Lender's Disbursement Statement.

  7. Obtain new survey information through either an Affidavit In Lieu of Survey (ATG Form 3001) or an Affidavit of No New Improvements (ATG Form 3030), as applicable.

  9. Confirm that there has been no new construction subsequent to the original mortgage.

  11. Prepare a Date Down Endorsement 2 (ATG Form 2017), changing the effective date of the original policy to the recording date of the modification. We will not insure the new modification with the old effective date.

  13. Add the Mortgage Modification information to Schedule A using the Date Down Endorsement 2. If there are any other intervening liens or encumbrances that you have not obtained a payoff for, list them as new Schedule B exceptions.

  15. Follow ATG's standard underwriting guidelines and procedures in examining your search results, copies of documents, and modifying the policy.

  17. Remit a copy of your Date Down Endorsement 2 with an Accounting Information Schedule and the premium to ATG.

  19. Save copies of all documents in your title file for the original Mortgagee Policy.

If you have any questions or concerns about mortgage modifications, please contact the ATG Underwriting Department,, 217.403.0020, or 312.752.1990.

Posted on: Wed, 05/16/2001 - 12:04pm