Page 55 - ALTA Endorsements Guide

A L T A E N D O R S E M E N T

1-06 to 9.6.1-06 9.7-06 to 17.1-06 17.2-06 to 28.3-06 29-06 to 36.6-06 36.7-06 to 46-06

ALTA ENDORSEMENT 14-06

FUTURE ADVANCE PRIORITY

Revised (2-3-11)

1. The insurance for Advances added by Sections 2 and 3 of this endorsement is subject to the exclusions
in Section 4 of this endorsement and the Exclusions from Coverage in the Policy, except Exclusion
3(d), the provisions of the Conditions, and the exceptions contained in Schedule B.

a. “Agreement,” as used in this endorsement, shall mean the note or loan agreement, the
repayment of Advances under which is secured by the Insured Mortgage.

b. “Advance,” as used in this endorsement, shall mean only an advance of principal made after the
Date of Policy as provided in the Agreement, including expenses of foreclosure, amounts
advanced pursuant to the Insured Mortgage to pay taxes and insurance, assure compliance with
laws, or to protect the lien of the Insured Mortgage before the time of acquisition of the Title, and
reasonable amounts expended to prevent deterioration of improvements, together with interest on
those advances.

c. “Changes in the rate of interest,” as used in this endorsement, shall mean only those changes in
the rate of interest calculated pursuant to a formula provided in the Insured Mortgage or the
Agreement at Date of Policy.

2. The Company insures against loss or damage sustained by the Insured by reason of:
a. The invalidity or unenforceability of the lien of the Insured Mortgage as security for each Advance.

b. The lack of priority of the lien of the Insured Mortgage as security for each Advance over any lien
or encumbrance on the Title.
c. The invalidity or unenforceability or lack of priority of the lien of the Insured Mortgage as security
for the Indebtedness, Advances and unpaid interest resulting from (i) re-Advances and
repayments of Indebtedness, (ii) earlier periods of no indebtedness owing during the term of the
Insured Mortgage, or (iii) the Insured Mortgage not complying with the requirements of state law
of the state in which the Land is located to secure Advances.

3. The Company also insures against loss or damage sustained by the Insured by reason of:
a. The invalidity or unenforceability of the lien of the Insured Mortgage resulting from any provisions
of the Agreement that provide for (i) interest on interest, (ii) changes in the rate of interest, or (iii)
the addition of unpaid interest to the Indebtedness.
b. Lack of priority of the lien of the Insured Mortgage as security for the Indebtedness, including any
unpaid interest that was added to principal in accordance with any provisions of the Agreement,
interest on interest, or interest as changed in accordance with the provisions of the Insured
Mortgage, which lack of priority is caused by (i) changes in the rate of interest, (ii) interest on
interest, or (iii) increases in the Indebtedness resulting from the addition of unpaid interest.

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