Chicago Title Endorsement Handbook - Chicago, IL

ALTA 2006 • 107 FUTURE ADVANCE – REVERSE MORTGAGE – FORM 14.3-06 ALTA Endorsement — Form 14.3-06 is available for loan policies only. This endorsement provides coverage for Reverse Mortgages by adding subparagraphs (iv) and (v) to paragraph 2(c) and by adding 2(d). This endorsement affirmatively insures the priority and enforceability of the lien of the Insured Mortgage with respect to the terms of the mortgage that allow for future advances and the repayment and re-advances of indebtedness. In addition, it includes coverage for the consequences of a variable rate, including possible negative amortization (or interest on interest). This endorsement also covers the effect of the indebtedness on the note being reduced to zero before being increased and compliance with state laws dealing with what is needed to secure these advances, e.g. if specific language needs to appear on the face of the recorded instrument. This endorsement provides coverage for additional advances made in jurisdictions where state law gives such advances priority over intervening matters as long as the lender did not have actual knowledge of such matters. This endorsement modifies Exclusions from Coverage No. 3(d). This specific form may not be available in every state due to statutory, regulatory or case law issues. There may be a similar state form available if the ALTA version is not. NOTE: For Illinois Transactions - in paragraph 4 of the endorsement subparagraph f is added, as follows: “The loss of priority of an advance to a mechanic’s or materialmens’ lien”. Also in Illinois transactions - in paragraph 4 a subparagraph g will be added that reads: “Lack of priority of advances made more than 18 months after the date of recording of the Insured Mortgage, except advances made pursuant to 735 ILCS 5/15-1302(b)(1)". ALTA Endorsement — Form 14.3-06 (Future Advance – Reverse Mortgage – 2/3/11)