Current through Reg. 50, No. 187; September 24, 2024
(1) An
additional risk exposure for title insurers has been created by the enactment
into law of the Federal "Truth in Lending Act," incorporated in Title 15,
United States Code Annotated, Section 1601 et seq., effective May 29,
1968.
(2) Such additional risk
exposure is specifically though not exhaustively manifest in the additional
risks and expenses incident to the issuance of the "Truth in Lending
Endorsement" as reflected in and confined to "Endorsement Number Two of the
American Land Title Association" because of the following factors:
(a) The title insurer must determine that a
lien is being made for commercial purposes, other than agricultural
purposes.
(b) The title insurer
must determine that the borrower falls within the category of entities as set
forth in Regulation "Z" promulgated by the Federal Reserve.
(c) The title insurer must determine that the
home being purchased is or will be the residence of the borrower.
(d) The title insurer must determine that the
mortgage being insured by the policy to which the endorsement is being attached
is a first lien on the land.
(e)
The title insurer must determine that proceeds of the mortgage are disbursed to
the seller.
(f) The title insurer
may be legally obligated to legally refute the allegations in a foreclosure
action against the mortgagor that the matters shown above were not accurately
determined.
(g) The penalty for
failure to make such correct determination of the above factors may make the
title insurer incur liability for the payment or settlement of claims thereon
which would not otherwise be incurred in the absence of such
Endorsement.
(3) The
foregoing factors substantially increase the increment of risk, the expense,
and the labor incident to the issuance of title insurance policies brought
within the purview of the Truth in Lending Act by utilization of ALTA
Endorsement Number Two. Such consequences have a significant potential effect
on the fiscal stability of the respective title insurers and the business trust
title insurer authorized to transact the business of title insurance in the
State of Florida.
(4) Any potential
adverse effect of such factors on the fiscal stability of said title insurers
with consequent detriment to the title insuring public would be ameliorated or
negated by the promulgation of a specific premium rate schedule applicable to
such Truth in Lending Endorsement which would reasonably compensate the title
insurers for such additional increments of risk.
(5) In recognition of the above findings and
factors applicable to Truth in Lending Endorsement Number Two of the ALTA, the
following premium schedule is hereby promulgated:
TEN PERCENT (10%) OF MORTGAGEE POLICY PROMULGATED RATE WITH A
MINIMUM CHARGE OF TWENTY-FIVE DOLLARS ($25.00) AND A MAXIMUM CHARGE OF ONE
HUNDRED DOLLARS ($100.00).
(6)
(a) In
recognition of the increased risk in issuing the following endorsements on a
mortgage or owner's policy, as such endorsements have been approved by the
Office, the minimum premium shall be $25.00 for each endorsement on any
mortgage or owner's policy issued. The endorsements shall be itemized on the
closing statement furnished to the insured.
1.
ALTA 4/4.1 Condominium.
2. ALTA
5/5.1 Planned Unit Development.
3.
ALTA 6 Renegotiable Rate.
4. ALTA
6.1 Variable Rate.
5. ALTA 6.2
Negative Amortization.
6. ALTA 7.0
Manufactured Housing.
7. ALTA
8.0/8.1 Environmental Protection Lien.
8. Revolving Credit
Endorsement.
(b) The
language of the Revolving Credit Endorsement shall conform to the following
endorsement language:
1. Notwithstanding any
terms or provisions in this policy to the contrary, the company hereby insures
the insured that advances made subsequent to the Date of Policy, but within 20
years of the Date of Policy, pursuant to the terms of the mortgage described in
Schedule A of this policy, shall be included within the coverage of this
policy, even though the principal indebtedness may have been reduced from time
to time preceding any such subsequent advances. The Company's liability under
this policy shall be reduced hereafter by the filing for record by the
mortgagor or his successors in title of a notice pursuant to Section
697.04(1),
F.S., limiting the maximum principal amount that may be so secured to an amount
not less than the amount actually advanced at the time of such
filing.
2. The Company further
assures the insured that such subsequent advances shall have the same priority
over liens, encumbrances and other matters disclosed by the Public Records, as
do advances secured by the insured mortgage as of the Date of Policy, except
for the following matters, if any, arising subsequent to the Date of Policy:
a. Federal tax liens which may be recorded
against the mortgagor(s) or their successor in title more than forty-five days
prior to the making of any such subsequent advances.
b. Federal tax liens which may be recorded
against the mortgagor(s) or their successor in title within forty-five days of
making any such subsequent advances, the existence of which are actually known
to the insured prior to the making of any such subsequent advances.
c. Ad valorem real estate taxes and
assessments and other government liens which are on a parity with ad valorem
real estate taxes pursuant to F.S.
d. Bankruptcies of the mortgagor(s) or their
successors in title prior to the making of any such subsequent
advances.
e. Defects, liens,
encumbrances or other matters, the existence of which are actually known to the
insured prior to the making of any such subsequent
advances.
3. The total
liability of the company under the policy and any endorsements therein shall
not exceed, in the aggregate, the face amount of the policy and sums which the
Company is obligated under the conditions and stipulations thereof to
pay.
4. This endorsement is made a
part of the policy. It is subject to all the terms of the policy and prior
endorsements. Except as expressly stated on this endorsement, the terms, dates
and amount of the policy and prior endorsements are not
changed."
(7)
(a) Both endorsements and affirmative type
coverages and their applicable risk rate premium must be approved by the Office
prior to their issuance in this state. Accordingly, endorsements and
affirmative type coverages are categorized as follows:
1. Permitted endorsements and/or affirmative
type coverages,
2. Prohibited
endorsements and/or affirmative type coverages,
3. Endorsements and/or affirmative type
coverages with no specific Office approval required when there is no increased
risk resulting to the insurer.
(b)
1. With
the exception of those endorsements listed in subsection (6) of Rule
69O-186.005, F.A.C., above, no
endorsement or affirmative type coverage shall be issued except as set forth in
this section.
2. If there is a
change in a current adopted endorsement and the change results in a further
limitation of coverage, the endorsement may be submitted to the Office for
approval without an amendment to these rules.
(c) With the exception of policy forms and
those endorsements listed in subsection (6) of Rule
69O-186.005, F.A.C., above, all
approvals of endorsements given prior to the effective date of this rule are
withdrawn. This section shall have no effect on the validity of those
endorsements issued prior to the effective date of these rule
amendments.
(d) All issued
endorsements shall be itemized on the closing statement furnished to the
insured with costs for each endorsement shown.
(e) Specific endorsements may be issued by
reference to a master list of approved endorsements and have the same validity
as if issued individually on each transaction so long as the language in the
endorsement specifically conforms without any additions or deletions to the
endorsement language as set forth in this section. Any such master list of
approved endorsements shall only be issued in conjunction with a mortgage
(mortgagee) title insurance policy.
(8) The following permitted endorsements and
endorsement language are approved:
(a) Florida
Endorsement Form 9; (Restrictions, Easements, Minerals):
1. This endorsement shall not be issued
unless there has been a release of the right of entry of the mineral
reservation, nor shall it be issued over any adverse matter or defect in title
unless such adverse matter or defect has been removed or determined to be
legally unenforceable.
2. The
language of the Florida Endorsement Form 9 shall conform to the following
endorsement language:
"The Company insures the owner of the indebtedness secured by
the insured mortgage against loss or damage sustained by reason of:
1. Any incorrectness in the assurance that,
at date of policy:
(a) There are no covenants,
conditions or restrictions under which the lien of the mortgage referred to in
Schedule A can be divested, subordinated or extinguished, or its validity,
priority or enforceability impaired.
(b) Unless expressly excepted in Schedule B:
(1) There are no present violations on the
land of any enforceable covenants, conditions or restrictions nor do any
existing improvements on the land violate building setback lines shown on a
plat of subdivision recorded or filed in the public records.
(2) Any instrument referred to in Schedule B
as containing covenants, conditions or restrictions on the land does not, in
addition, (i) establish an easement on the land; (ii) provide a lien for
liquidated damages; (iii) provide for a private charge or assessment; (iv)
provide for an option to purchase, a right of first refusal or the prior
approval of a future purchaser or occupant.
(3) There is no encroachment of existing
improvements located on the land onto adjoining land, nor any encroachment onto
the land of existing improvements located on adjoining land.
(4) There is no encroachment of existing
improvements located on the land onto that portion of the land subject to any
easement excepted in Schedule B.
(5) There are no notices of violation of
covenants, conditions, and restrictions relating to environmental protection
recorded or filed in the public record.
2. Any future violation on the land of an
existing covenant, condition or restriction occurring prior to the acquisition
of title to the estate or interest in the land, provided the violation results
in:
(a) Impairment or loss of the lien of the
insured mortgage; or,
(b) Loss of
title to the estate or interest in the land if the insured shall acquire title
in satisfaction of the indebtedness secured by the insured
mortgage.
3. Damage to
existing improvements (excluding lawns, shrubbery or trees).
(a) Which are located on or encroach upon
that portion of the land subject to any easement excepted in Schedule B, which
damage results from the exercise of the right to maintain the easement for the
purpose for which it was granted or reserved.
(b) Which results from the future exercise of
any right to use the surface of the land for the extraction or development of
minerals excepted from the description of the land or excepted in Schedule
B.
4. Any final court
order or judgment requiring the removal from any land adjoining the land of any
encroachment excepted in Schedule B.
5. Any final court order or judgment denying
the right to maintain any existing improvement on the land because of any
violation of covenants, conditions or restrictions or building setback lines
shown on a plat or subdivision recorded or filed in the public records.
Wherever in this endorsement the words "covenants, conditions
or restrictions" appear, they shall not be deemed to refer to or include the
terms, covenants, conditions or limitations contained in an instrument creating
a lease.
As used in subparagraphs (1)(b)1. and 5., the phrase,
"covenants, conditions, or restrictions" shall not be deemed to refer to or
include any covenants, conditions or restrictions relating to environmental
protection.
This endorsement is made a part of the policy and is subject
to all of the terms and provisions thereof and any prior endorsements thereto.
Except to the extent expressly stated, it neither modifies any of the terms and
provisions of the policy and any prior endorsements, nor does it extend the
effective date of the policy and any prior endorsements, nor does it increase
the face amount thereof."
(b) Navigational Servitude - The language of
the Navigational Servitude Endorsement (Florida) shall conform to the following
endorsement language:
1. The Company hereby
insures the insured against loss or damage, not exceeding the amount of
insurance stated in Schedule A, and costs and attorney's fees and expenses
which the Company may become obligated to pay hereunder, sustained or incurred
by the insured by reason of forced removal pursuant to a final judgment of a
court of competent jurisdiction in favor of the United States Government
requiring the removal of any improvements located on the land at date of policy
resulting from the exercise of the rights of the United States Government with
respect to control over navigable waters, or lands which formerly constituted
navigable waters, for purposes of navigation and commerce.
2. This endorsement is made a part of the
policy and is subject to all the terms and provisions thereof and of any prior
endorsements thereto. Except to the extent expressly stated, it neither
modifies any of the terms and provisions of the policy and any prior
endorsements, nor does it extend the effective date of the policy and any prior
endorsements, nor does it increase the face amount
thereof."
(c) Shared
Appreciation - The Shared Appreciation Endorsement (Florida) shall conform to
the following endorsement language:
1. The
Company hereby insures the Insured against loss or damage by reason of:
a. The invalidity or unenforceability of the
lien of the insured mortgage resulting from the provisions therein which
provide for a shared appreciation interest.
b. Loss of priority of the lien of the
insured mortgage as security for (1) the unpaid principal balance of the loan;
(2) the stated interest; and (3) the shared appreciation interest, which loss
of priority is caused by the provisions in the insured mortgage for payment or
allocation to the insured mortgagee of any shared appreciation
interest.
c. "Stated Interest" as
used in this endorsement shall mean only the per annum interest on the unpaid
principal balance of the loan provided in the insured mortgage at date of
Policy.
d. "Shared Appreciation
Interest" as used in this endorsement shall mean only those amounts (calculated
pursuant to the formula provided in the insured mortgage) payable or allocated
to the insured mortgagee, out of the amount, if any, by which the land has
appreciated in value as established pursuant to the provisions of the insured
mortgage at date of Policy.
e. This
endorsement does not insure against loss or damage based upon (a) usury, or (b)
any consumer credit protection or truth in lending law, or (c)
bankruptcy.
f. This endorsement is
made a part of the policy and is subject to all of the terms and provisions
thereof and of any prior endorsements thereto. Except to the extent expressly
stated, it neither modifies any of the terms and provisions of the policy and
any prior endorsements, nor does it extend the effective date of the policy and
any endorsements, nor does it increase the face amount
thereof."
(d)
Additional Interest - The language of the Additional Interest Endorsement
(Florida) shall conform to the following endorsement language:
1. The Company hereby insures against loss or
damage by reason of:
a. The invalidity or
unenforceability of the lien of the insured mortgage resulting from the
provisions therein which provide for additional interest subsequent to date of
Policy.
b. Loss of priority of the
lien of the insured mortgage as security for (1) the unpaid principal balance
of the loan; (2) the stated interest; (3) the additional interest, which loss
of priority is by the provisions in the insured mortgage for payment or
allocation to the insured mortgagee of any additional
interest.
2. "Stated
Interest" as used in this endorsement shall mean only the fixed percent per
annum interest on the unpaid principal balance of the loan provided in the
insured mortgage at date of Policy.
3. "Additional Interest" as used in this
endorsement, shall mean only those amounts calculated pursuant to the formula
provided in the insured mortgage payable or allocated to the insured.
4. This endorsement does not insure against
loss or damage based upon (a) usury, or (b) any consumer credit protection or
truth in lending law, or (c) bankruptcy.
5. This endorsement is made a part of the
policy and is subject to all of the terms and provisions thereof and of any
prior endorsements thereto. Except to the extent expressly stated, it neither
modifies any of the terms and provisions of the policy and any prior
endorsements, nor does it extend the effective date of the policy and any prior
endorsements, nor does it increase the face amount
thereof."
(e) Option
Endorsement - The language of the Option Endorsement (Florida) shall conform to
the following endorsement language:
1. With
respect to the option to purchase described in Schedule B, the option to
purchase is hereby incorporated into Schedule A of the policy as an interest
insured thereby, vested in the insured, and the Company insures against loss or
damage sustained or incurred by the insured by reason of:
a. The unenforceability of the right to
exercise the option to purchase except to the extent that such unenforceability
or claim thereof is based on the failure of the insured to have fulfilled the
terms and conditions of the option.
b. The priority over the option to purchase
of any conveyance made of the fee simple estate in the land or of any liens or
encumbrances created therein after the date of policy, excepting those liens or
encumbrances created or consented to by the insured or created by statute in
favor of or for the benefit of governmental bodies or public utilities
(including without limitation real estate taxes, special assessments,
demolition liens, drainage liens and water liens).
2. Nothing contained in this endorsement
shall be construed as insuring the insured against loss or damage sustained or
incurred by reason of:
a. Disaffirmance of the
option under the provisions of the bankruptcy code or state insolvency
law.
b. The effect of any
condemnation proceeding including the failure of the optionee to receive all or
part of an award entered in a condemnation proceeding unless failure to share
in said award stems solely from a court order or judgment which constitutes a
final determination and adjudges the option to be invalid.
c. Any lien, or right to a lien, for
services, labor or material heretofore or hereafter furnished, imposed by
law.
3. Other than
expenses necessary for a judicial determination or defense of the validity and
priority of the option as described in subsections (1) and (2). above, loss
under this endorsement does not include:
a.
Expenses required to enforce the option and to obtain a transfer of title from
the party or entity in whom title to any interest in the land is vested at the
time of exercising the option; or
b. Expenses required to obtain valid
conveyances or releases of any rights, interests or liens related to the land
which appear of record or are known to the insured at the time of exercising
the option.
4. The
measure of the loss or damage sustained by the insured under this policy shall
be:
a. The excess of the fair market value of
the property at the time the insured attempts to exercise the option (or when a
law suit contesting the validity of the option is filed, if filed prior to the
attempted exercise of the option) above the price at which the insured could
acquire the property by exercise of the option; and,
b. The unreimbursed portion of the
consideration given by the insured to obtain the option.
5. This endorsement is made a part of the
policy and is subject to all of the terms and provisions thereof and of any
prior endorsements thereto. Except to the extent expressly stated, it neither
modifies any of the terms and provisions of the policy and any prior
endorsements, nor does it extend the effective date of the policy and any prior
endorsements, nor does it increase the face amount
thereof."
(f) Change of
Partners - The Change of Partners (Fairways) Endorsement (Florida) shall
conform to the following endorsement language:
"1. The Company agrees that in the event of
an occurrence of loss insured against by this policy, the Company will not deny
liability hereunder on the ground that a dissolution of the partnership has
occurred or a new partnership has been formed by reason of one or more of the
general partners transferring their interest to another person or entity; by
reason of a withdrawal of one or more of the general partners from the
partnership; or by reason of the addition of one or more persons or entities as
partners.
2. Nothing contained
herein shall be construed as extending the insurance hereunder as to matters
attaching or created subsequent to the date hereof; or insuring the status of
the insured after the transfer of the partnership interest, the withdrawal of
partners, or the addition of new partners.
3. This endorsement is made a part of the
policy and is subject to all of the terms and provisions thereof and of any
prior endorsements thereto. Except to the extent expressly stated, it neither
modifies any of the terms and provisions of the policy and any prior
endorsements, nor does it extend the effective date of the policy and any prior
endorsements, nor does it increase the face amount
thereof."
(g) Contiguity
Endorsement - The Contiguity Endorsement (Florida) shall conform to the
following endorsement language:
"1. The
Company insures the Insured herein against loss or damage by virtue of any
inaccuracy in the following statement, to wit: Parcel ___ of the legal
description and Parcel ___ of the legal description are contiguous to each
other along the ___ line of Parcel ___ and ___ line of Parcel ___, and, taken
as a tract, constitute one Parcel of land.
2. This endorsement is made a part of the
policy and is subject to all of the terms and provisions thereof and of any
prior endorsements thereto. Except to the extent expressly stated, it neither
modifies any of the terms and provisions of the policy and any prior
endorsements, nor does it extend the effective date of the policy and any prior
endorsements, nor does it increase the face amount
thereof."
(h) Survey
Endorsement - The language of the Survey Endorsement (Florida) shall conform to
the following endorsement language:
"The Company hereby acknowledges the lands described in
Schedule A are the same lands described in the survey prepared by ______ dated
_____; however, the Company does not insure the accuracy or completeness of
said survey."
(i)
Construction Loan Up-date - The language of the Construction Loan Up-date
Endorsement shall conform to the following endorsement language:
1. The liability of the Company is increased
by $_____ to include disbursements made pursuant to requisition(s) _____ for a
cumulative total to date of $______.
2. The Company insures there have been no
instruments filed among the Public Records of ___ County, affecting title to
the lands described in Schedule A from ______ through ______, other than the
following:
3. The Company insures
each of the foregoing is subordinate to the lien of the mortgage insured
except:
4. This endorsement is made
a part of the policy and is subject to all of the terms and provisions thereof
and of any prior endorsements thereto. Except to the extent expressly stated,
it neither modifies any of the terms and provisions of the policy and any prior
endorsements, nor does it extend the effective date of the policy and any prior
endorsements, nor does it increase the face amount
thereof."
(j) Foreign
Currency Endorsement - The language of the Foreign Currency Endorsement shall
conform to the following endorsement language:
1. The Company hereby insures against loss or
damage by reason of:
a. The invalidity or
unenforceability of the lien of the insured mortgage resulting from the
provisions therein which provide for revaluation of the indebtedness secured
thereby based upon changes in the conversion rate between U.S. dollars and the
stated foreign currency.
b. Loss of
priority of the lien of the insured mortgage as security for the unpaid
principal balance of the loan, which loss of priority is caused by such changes
in the conversion rate.
2. The Company acknowledges that changes from
time to time in the conversion rate between U.S. dollars and the stated foreign
currency may decrease or increase the dollar amount of the indebtedness secured
by the insured mortgage. The Company hereby agrees that, so long as any portion
of the indebtedness secured by the insured mortgage shall remain outstanding,
any such increase in the dollar amount of indebtedness shall not be deemed by
the Company to constitute additional principal indebtedness created subsequent
to date of policy within the meaning of paragraph 8 of the Conditions and
Stipulations of the policy; provided, however, that the total liability of the
Company under the policy at any time shall not exceed, in the aggregate, the
face amount of the policy and the costs which the Company is obligated to pay
under the terms and provisions of the policy.
3. "Changes in the conversion rate" as used
in this endorsement, shall mean only those changes in the conversion rate
calculated pursuant to the formula provided in the insured mortgage at date of
policy.
4. This endorsement does
not insure against loss or damage based upon (a) the failure to pay any
mortgage recording tax or similar charge applicable to the mortgage described
in Schedule A at date of policy or as a result of increases in the amount of
indebtedness resulting from changes in the conversion rate of U.S. dollars and
the stated foreign currency, (b) usury, (c) any consumer credit protection or
truth-in-lending law, (d) bankruptcy, or (e) any invalidity or unenforceability
or loss of priority of the mortgage as to any indebtedness in amounts in U.S.
dollars in excess of the amount stated in the policy.
5. This endorsement is made a part of the
policy and is subject to all of the terms and conditions thereof and of any
prior endorsements thereto, except that the insurance afforded by this
endorsement is not subject to paragraph (3)(d), of the Exclusions from
Coverage. Except to the extent expressly stated, it neither modifies any of the
terms and provisions of the policy and any prior endorsements, nor does it
increase the face amount thereof."
(k) Assignment of Mortgage - The language of
the Assignment of Mortgage Endorsement shall conform to the following
endorsement language:
"Endorsement number _________________
Name of original insured:
Original effective date:
Original amount of insurance $________________
Agent's file reference: ______________________
The Company insures that the mortgage described in the above
numbered and dated policy has been duly assigned to:
________________________________________________
Assignee
________________________________________________
Address
by an assignment dated the _____ day of _____, 19___, and
recorded the _____ day of _____, 19___, in Official Records _____, Page ____,
under Clerk's File Number _____, of the Public Records of ___ County,
Florida.
This endorsement is to be attached to and form a part of the
above numbered and dated policy issued by _____"
(l) Balloon Mortgage Endorsement - The
language of the Balloon Mortgage Endorsement shall conform to the following
endorsement language:
1. The Company insures
the insured mortgagee against loss or damage by reason of:
a. The invalidity or unenforceability of the
lien of the insured mortgage resulting from the provisions therein which
provide for a conditional right to refinance and a change in the rate of
interest as set forth in the Mortgage Rider.
b. Loss of priority of the lien of the
insured mortgage as security for the unpaid principal balance of the loan,
together with interest thereon, which loss of priority is caused by the
exercise of the conditional right to refinance and the extension of the loan
term to the new maturity date set forth on the rider and a change in the rate
of interest, provided that all the conditions set forth in paragraphs 2 and 5
of the Balloon Mortgage Rider have been met, and there are no other liens,
defects, encumbrances, or other adverse matters affecting title recorded
subsequent to the date of policy.
2. This endorsement does not insure against
loss or damage based upon, (a) Usury or (b) any consumer credit protection or
truth-in-lending law or (c) bankruptcy.
3. This endorsement is made a part of the
policy and is subject to all of the terms and provisions thereof and of prior
endorsements thereto. Except to the extent expressly stated, it neither
modifies any of the terms and provisions of the policy and any prior
endorsements, nor does it extend the effective date of the policy and any prior
endorsements, nor does it increase the face amount
thereof."
(9)
Recognizing that the endorsements listed in subsection 8 of this section and
the affirmative language in a title policy imposes certain obligations and
liabilities on a title insurer and agent and the issuance of endorsements
and/or affirmative language in a title policy creates an additional risk and a
considerable amount of work in addition to the initial search and examination
of title required to write a basic policy, a minimum premium shall be charged
and collected by an insurer or agent where coverage in the form of affirmative
language and/or endorsements to a policy are required. Therefore, the risk rate
premium for each of the endorsements listed in paragraph 8 of this section are
as follows:
|
1-4 Family Unit Residential Risks
|
$25 minimum per endorsement
|
|
|
$100 maximum per endorsement
|
|
Other Risks (commercial or greater than 1-4 family
residential risk.)
|
$100 Minimum per endorsement
|
except that the risk rate premium for the following approved
endorsements shall be at minimum the percentage of the total policy premium as
indicated; however, on a simultaneously issued mortgage policy, the endorsement
charge shall be based on the underlying owner, and loan policy premium:
(a) Florida Endorsement Form 9-10%.
(b) Navigational Servitude -
10%.
(10) Additional risk
premium must be charged if additional insurance is purchased.
(11) All loan policies and endorsements are
subject to the 125% rule as set forth in paragraph
69O-186.003(4)(b),
F.A.C., except that a policy with a Shared Appreciation, or Additional Interest
Endorsements may be issued for an amount up to 150% in excess of the principal
debt.
(12) The applicable rate to
be charged and collected for a loan policy after a mortgage balloons and is
subsequently refinanced by the same lender, and borrower on the same land shall
be the rates as described in paragraph (5) of Rule
69O-186.003, F.A.C.,
substitution loan rates.
(13) The
Substitution Loan Rate provided in subsection
69O-186.003(5),
F.A.C., shall apply to any endorsement which insures a modification of a
mortgage which was insured by an outstanding policy where the modification
agreement effects any change in the terms, conditions, priority, or security,
other than:
(a) An extension of the time for
payment of the secured obligation;
(b) Any decrease in the interest rate of the
insured mortgage, provided the "cap" on a variable rate mortgage is not greater
than the original "cap" and/or the "cap" is not greater than the original fixed
rate;
(c) Any increase in the
interest rate of the insured mortgage, provided the endorsement contains an
exception for the loss of priority occasioned by the increase;
(d) Changes in an amortization schedule to
extend the term of the insured mortgage;
(e) A release of a portion of the secured
property;
(f) A correction to
either perfect the lien of the insured mortgage or comply with the terms of the
lender's original commitment;
(g)
Future advances made pursuant to Section
697.04, F.S.; or
(h) Encumbrances of additional parcels under
a revolving construction loan agreement contained in the original mortgage and
contemplated by subsection
69O-186.003(10),
F.A.C.
(14) The retention
rate for an insurer shall be the same as set forth in subsection
69O-186.003(11),
F.A.C.
(15)
(a) The following are prohibited endorsements
and affirmative coverages that shall not be issued in this state:
1. Doing Business Endorsement.
2. Non Imputation Endorsement (Imputation of
knowledge).
3. Access.
4. Location.
5. Expanded Insured Endorsement.
6. Street Assessment Endorsement.
7. Zoning Endorsement.
8. Usury.
(b) The extension of special affirmative
coverage by indirect means is prohibited.
(16) The following endorsements can be issued
or affirmative language is permitted with no specific approval required from
the Office:
(a) Endorsements correcting
mistakes.
(b) Future Insurance
(continuing liability under existing policies).
(c) Endorsements deleting exceptions which no
longer affect title to the land.
(d) Endorsements insuring future
advances.
(e) Changes in effective
dates (loan policies only).
(f) Gap
coverage endorsement.
(g) Insurance
against the attempted enforcement of known claims for ascertainable sums of
money in reliance on security commensurate with such risk.
(h) Deletion of General Exceptions.
(i) Endorsements modifying the standard
owner's and mortgagee policy to convert to a leasehold policy previously
approved by the Office.
(j) Tie-in
Spreader (Intra Florida properties only).
Rulemaking Authority 624.308, 627.777, 627.782 FS. Law
Implemented 624.307(1), 627.777, 627.782, 697.04(1)
FS.
New 9-17-71, Repromulgated 12-24-74, Formerly 4-21.05,
Amended 6-25-86, 2-26-90, 2-27-91, Formerly 4-21.005, Amended 2-13-95, Formerly
4-186.005, Amended 11-3-05.
