Page 315 - ALTA Endorsements Guide

ADDENDUM RETURN TO TABLE OF CONTENTS

Loan Policy of Title insurance
[2021 v. 01.00 (07-01-2021)]

7. OPTIONS TO PAY OR OTHERWISE SETTLE CLAIMS; TERMINATION OF LIABILITY
In case of a claim under this policy, the Company has the following additional options:
SAMPLE
a. To Pay or Tender Payment of the Amount of Insurance or to Purchase the Indebtedness
i. To pay or tender payment of the Amount of Insurance under this policy. In addition, the Company will pay any costs, attorneys’ fees, and
expenses incurred by the Insured Claimant that were authorized by the Company up to the time of payment or tender of payment and that
the Company is obligated to pay; or
ii. To purchase the Indebtedness for the amount of the Indebtedness on the date of purchase. In addition, the Company will pay any costs,
attorneys’ fees, and expenses incurred by the Insured Claimant that were authorized by the Company up to the time of purchase and that
the Company is obligated to pay.
If the Company purchases the Indebtedness, the Insured must transfer, assign, and convey to the Company the Indebtedness and the
Insured Mortgage, together with any collateral security.
Upon the exercise by the Company of either option provided for in Condition 7.a., the Company’s liability and obligations to the Insured under
this policy terminate, including any obligation to defend, prosecute, or continue any litigation.
b. To Pay or Otherwise Settle with Parties other than the Insured or with the Insured Claimant
i. To pay or otherwise settle with parties other than the Insured for or in the name of the Insured Claimant. In addition, the Company will pay
any costs, attorneys’ fees, and expenses incurred by the Insured Claimant that were authorized by the Company up to the time of payment
and that the Company is obligated to pay; or
ii. To pay or otherwise settle with the Insured Claimant the loss or damage provided for under this policy. In addition, the Company will pay
any costs, attorneys’ fees, and expenses incurred by the Insured Claimant that were authorized by the Company up to the time of payment
and that the Company is obligated to pay.
Upon the exercise by the Company of either option provided for in Condition 7.b., the Company’s liability and obligations to the Insured under this
policy for the claimed loss or damage terminate, including any obligation to defend, prosecute, or continue any litigation.

8. CONTRACT OF INDEMNITY; DETERMINATION AND EXTENT OF LIABILITY
This policy is a contract of indemnity against actual monetary loss or damage sustained or incurred by an Insured Claimant who has suffered loss or
damage by reason of matters insured against by this policy. This policy is not an abstract of the Title, report of the condition of the Title, legal opinion,
opinion of the Title, or other representation of the status of the Title. All claims asserted under this policy are based in contract and are restricted to
the terms and provisions of this policy. The Company is not liable for any claim alleging negligence or negligent misrepresentation arising from or in
connection with this policy or the determination of the insurability of the Title.
a. The extent of liability of the Company for loss or damage under this policy does not exceed the least of:
i. the Amount of Insurance;
ii. the Indebtedness;
iii. the difference between the fair market value of the Title, as insured, and the fair market value of the Title subject to the matter insured
against by this policy; or
iv. if a Government Mortgage Agency or Instrumentality is the Insured Claimant, the amount it paid in the acquisition of the Title or the
Insured Mortgage or in satisfaction of its insurance contract or guaranty relating to the Title or the Insured Mortgage.
b. Fair market value of the Title in Condition 8.a.iii. is calculated using either:
i. the date the Insured acquires the Title as a result of a foreclosure or deed in lieu of foreclosure of the Insured Mortgage; or
ii. the date the lien of the Insured Mortgage or any assignment set forth in Item 4 of Schedule A is extinguished or rendered unenforceable
by reason of a matter insured against by this policy.
c. If the Company pursues its rights under Condition 5.b. and is unsuccessful in establishing the Title or the lien of the Insured Mortgage, as insured:
i. the Amount of Insurance will be increased by 15%; and
ii. the Insured Claimant may, by written notice given to the Company, elect, as an alternative to the dates set forth in Condition 8.b., to use
either the date the settlement, action, proceeding, or other act described in Condition 5.b. is concluded or the date the notice of claim
required by Condition 3 is received by the Company as the date for calculating the fair market value of the Title in Condition 8.a.iii.
d. In addition to the extent of liability for loss or damage under Conditions 8.a. and 8.c., the Company will also pay the costs, attorneys’ fees, and
expenses incurred in accordance with Conditions 5 and 7.

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