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Basic Manual of Title Insurance, Section III

Title Manual Main Index | Section III Index

Includes Rate Rules R-5 Effective 01/03/2014 | R-6 | R-7 | R-8 | R-9 |
R-10 Rescinded Effective 09/01/2013 | R-11 Effective 01/03/2014 | R-12 | R-13 |
R-14 | R-15 Effective 01/03/2014 | R-16


R-5. Simultaneous Issuance of Owner's and Loan Policies

THIS RULE MAY NOT BE APPLIED in connection with the issuance of a series of Loan Policies issued by reason of notes being apportioned to individual units in connection with a master policy covering the aggregate indebtedness, including improvements. Individual Loan Policies must be issued at the Basic Rate.

  1. Except as otherwise provided in this rule, when an Owner's Policy and Loan Policy(ies) are issued simultaneously, bearing the same date, and covering the same land, or a portion thereof, covered by the Owner's Policy and covering no other land, the Owner's Policy showing the lien(s) as an exception therein shall be issued at the Basic Rate, and the premium for the Loan Policy(ies) shall be $100.00 each.

  2. Should the amount of the Loan Policy(ies) exceed the amount of the Owner's Policy, the Basic Rate shall be charged for the Owner's Policy and the premium for the Loan Policy(ies) shall be at the Basic Rate plus $100.00 for each Loan Policy, less the Basic Rate for the Owner's Policy.

  3. If an Owner's Policy or Policies were previously issued:

    1. Covering the identical property to be covered by the Owner's Policy to be issued and

    2. The Owner's Policy is to be issued in accordance with P-8a and

    3. Within four (4) years after the date of the previously issued Owner's Policy or Policies and

    4. There has been no change in ownership of such property,

      credit shall be given against the premium of the Owner's Policy to be issued as provided in Rate Rule R-3; however, in no event shall the premium collected for such Owner's Policy be less than the regular minimum promulgated rate for an Owner's Policy.

  4. An insured under an existing Owner's Policy or Policies not issued in accordance with P-8a may, after completion of improvements on the property insured, receive credit as provided in Rate Rule R-3 toward a new Owner's Policy in an amount greater than the existing Owner's Policy or Policies; however, in no event may the Owner's Policy be issued for less than the minimum promulgated basic premium rate.

    This subsection applies only if, in addition to the criteria established in R-5.C. (1), (3) and (4) above, the land is residential property.

  5. When an Owner's Policy meeting the requirements of Rule R-2(b) is issued in the manner provided in Rule P-8a, and is issued simultaneously with a Loan Policy described in Rule R-2(a), bearing the same date, and covering the same land covered by the Loan Policy, or a portion thereof, and covering no other land, the premium for the Owner's Policy shall be $100.00. Should the amount of the Owner's Policy exceed the amount of the Loan Policy, the premium for the Owner's Policy shall be at the Basic Rate plus $100.00 less the Basic Rate (to be paid as provided in Rule R-2(a)) for the Loan Policy.

    In the application of this rule, if an Owner's Policy or Policies were previously issued covering the identical property to be covered by the owner's Policy to be issued and provided there has been no change in ownership of such property, credit shall be given against the premium for the Loan Policy to be issued as provided in R-3.

    Effective January 3, 2014 (Order 2806)


Title Manual Main Index | Section III Index

R-6. Subsequent Issuance of Mortgagee Policy

  1. Subsequent to Owner Policy - When a Mortgagee Policy(ies) is requested, subsequent to the issuance of an Owner Policy which excepted to the Vendor's Lien, the premium shall be one-half the Basic Rate. The lien to be insured must be as originally created, and excepted to in the Owner Policy, and not an extension or rearrangement thereof. Such Mortgagee Policy(ies) shall be issued in the amount of the current unpaid balance of said indebtedness. The Company shall be furnished such evidence as it may require verifying such unpaid balance, that the indebtedness is not in default and that there has been no acceleration of maturity.

    THIS RULE MAY NOT BE APPLIED in connection with the issuance of a series of Mortgagee Policies issued by reason of notes being apportioned to individual units in connection with a master policy covering the aggregate indebtedness, including improvements. Individual Mortgagee Policies must be issued at the Basic Rates.

  2. Subsequent to Mortgagee Policy - When a Mortgagee Policy(ies) is requested, for any reason whatsoever, on a lien already covered by an existing Mortgagee Policy(ies), but not on a renewal or extension thereof, the new policy being in the amount of the current unpaid balance of the indebtedness, the premium for the new policy shall be at the Basic Rate, but a credit for three-tenths (3/10) of said premium may be allowed.

  3. Subsequent to Mortgagee Policy - When an insolvent insurer is placed in permanent receivership by a court of competent jurisdiction and a Mortgagee Policy(ies) is requested on a lien already covered by an existing Mortgagee Policy(ies) of said insolvent insurer, but not on a loan to take up, renew, extend or satisfy an existing lien, the new policy being in the amount of the current unpaid balance of the indebtedness, the premium for the new policy shall be at the basic rate, but a credit for one-half of said premium shall be allowed, unless such credit would reduce the premium to less than the minimum Basic Rate, in which case the rate shall be the minimum Basic Rate. The insured shall surrender the existing Mortgagee Policy(ies) to the Company when placing the order for a new Mortgagee Policy(ies). The date of Policy for the new policy(ies) shall be the same Date of Policy as the existing Mortgagee Policy(ies).


Title Manual Main Index | Section III Index

R-7. Mortgagee Policies Covering First and Subordinate Liens Issued Simultaneously

When a Mortgagee Policy is issued on a First Lien, and other policy(ies) is issued on Subordinate Lien(s), created in the same transaction, covering the same land or a portion thereof, the premium for the First Lien policy shall be computed on the total of the combined liens; the premium for each Subordinate Lien policy shall be $5.00.


Title Manual Main Index | Section III Index

R-8. Mortgagee Policy, on a Loan to Take Up, Renew, Extend or Satisfy an Existing Lien(s)

On a Mortgagee Policy, issued on a loan to fully take up, renew, extend or satisfy an old mortgage(s) that is already insured by a Mortgagee Policy(ies), the new policy being in the amount of the note of the new mortgage, the premium for the new policy shall be at the Basic Rate, but a credit shall reduce the premium by the following amount:

  1. 40% of the premium calculated at the current rate on the written payoff balance of the old mortgage, such renewal occurring within two (2) years from the date of the Mortgagee Policy insuring the old mortgage;

  2. 35% of the premium calculated at the current rate on the written payoff balance of the old mortgage, such renewal occurring more than two (2) years but less than three (3) years from the date of the Mortgagee Policy insuring the old mortgage;

  3. 30% of the premium calculated at the current rate on the written payoff balance of the old mortgage, such renewal occurring more than three (3) years but less than four (4) years from the date of the Mortgagee Policy insuring the old mortgage;

  4. 25% of the premium calculated at the current rate on the written payoff balance of the old mortgage, such renewal occurring more than four (4) years but less than five (5) years from the date of the Mortgagee Policy insuring the old mortgage;

  5. 20% of the premium calculated at the current rate on the written payoff balance of the old mortgage, such renewal occurring more than five (5) years but less than six (6) years from the date of the Mortgagee Policy insuring the old mortgage;

  6. 15% of the premium calculated at the current rate on the written payoff balance of the old mortgage, such renewal occurring more than six (6) years but less than seven (7) years from the date of the Mortgagee Policy insuring the old mortgage.

After the lapse of seven (7) years from the date of the Mortgagee Policy insuring the old mortgage, the Basic Rate shall apply.

Where more than one chain of title, as the term "chain of title" is from time to time defined by the Commissioner, was involved in the issuance of the original policy(ies), and the new policy includes one or more of such additional chains of title involved in the issuance of the original policy(ies), an additional premium charge as established by the Commissioner shall be added for each additional chain of title involved. (See Rule R-9 for definition of "additional chain.")

On Mortgagee Policies, issued on multiple loans to fully take up, renew, extend or satisfy an old mortgage insured by a single Mortgagee Policy, the new policies being in the amount of the new mortgages, the premium for the larger Mortgagee Title Policy shall be at the Basic Rate, but a credit shall be allowed upon the premium as set forth previously in this rule. The premium for the remaining new Mortgagee Title Policy(ies) shall be at the Basic Rate. A credit shall still be allowed upon the premium as set forth in this rule even if not all of the new loans are insured or if only one of the new loans is insured. The reduction in rate as herein prescribed shall not apply to any case where any additional property not covered by the original policy(ies) is included in the policy to be issued.

In the calculation of the credit, the amount from the written payoff balance shall not exceed 100% of the original amount of the old mortgage. In no event shall the premium collected be less than the regular minimum promulgated rate for a Mortgagee Policy.

THIS RULE MAY NOT BE APPLIED in connection with the issuance of a series of Mortgagee Policies issued by reason of notes being apportioned to individual units in connection with a master policy covering the aggregate indebtedness, including improvements. Individual Mortgagee Policies must be issued at the Basic Rate.


Title Manual Main Index | Section III Index

R-9. Additional Chains of Title

In the event more than one chain of title is involved in the issuance (including determination of insurability of access) of any policy, the Company shall charge the minimum policy Basic Premium Rate for each additional chain. For purpose of applying this rule, contiguous parcels of land in one county shall be treated as one chain, provided record title to the land and record title to the access is vested in one owner at the time application is made. Each noncontiguous parcel having a separate chain shall be treated as a separate chain, except where two or more lots in the same platted subdivision, and having the same plat recording date, belong to the same owner, then such shall be treated as one chain. If the parcels of land lie in more than one county, there are separate chains of title in each county. No additional chain charge may be made for determination of insurability of access to land located within a subdivision, provided: (i) the subdivision is located in only one county, and (ii) the plat of the subdivision has been lawfully approved by an authorized governmental entity, is duly recorded, and the roads shown thereon have been dedicated for public use or for the use of the owners of lots located in the subdivision.


Title Manual Main Index | Section III Index

R-10. Owner's Policies - City Subdivision, Acreage Subdivisions, Industrial Tracts

Rate Rule R-10 is rescinded, effective September 1, 2013, due to obsolescence.

Effective January 3, 2014 (Order 2806)


Title Manual Main Index | Section III Index

R-11. Loan Policy Endorsements

Applicable only as provided in Rule P-9.

  1. Endorsement issued as provided in Rules P-9b(1) and P-9b(2)--The minimum Basic Premium Rate shall be charged for each T-3 Endorsement (Assignment of Mortgage) issued after the date of the original policy. In no event, however, shall such premium exceed 50% of the premium applicable to the original Loan Policy under the Schedule of Basic Rates.

  2. Endorsement issued as provided in Rule P-9b(3)--A premium of $100.00 shall be charged for each Endorsement Form T-38 Partial Release, Release of Additional Collateral, Modification Agreement, Reinstatement Agreement, or Release from Personal Liability issued within one year after the date of the original policy. If issued after said one year period, an additional $10.00 shall be charged for each twelve-month period thereafter, or a part thereof. In no event, however, shall such premium exceed 50% of the premium applicable to the original Loan Policy under the Schedule of Basic Rates.

  3. Endorsement issued as provided in Rule P-9b(4)--A premium of $50.00 shall be charged for the issuance of each Endorsement Form T-3 for Down Date Endorsement provided for in Rule P-9b(4).

  4. Endorsement issued as provided in Rule P-9b(6)--A premium of $20.00 shall be charged for the issuance of each Endorsement Form T-33 Variable Rate Mortgage Endorsement or Form T-33.1 Variable Rate Mortgage - Negative Amortization Endorsement authorized by Rule P-9b(6) except that such additional premium charge shall not be made if an additional premium charge has been made for the Loan Policy (to which the Endorsement is attached).

  5. Endorsement issued as provided in Rule P-9b(7)--A premium of $20.00 shall be charged for the issuance of Endorsement Form T-31 Manufactured Housing Endorsement as provided for in Rule P-9b(7). A premium of $50.00 shall be charged for the issuance of Endorsement Form T-31.1 Supplemental Coverage Manufactured Housing Unit Endorsement as provided for in Rule P-9b(7).

  6. Endorsement issued as provided in Rule P-9b(8)--A premium of $50.00 shall be charged for the issuance of each Endorsement Form T-35 Future Advance/Revolving Credit Endorsement provided for in Rule P-9b(8).

  7. Endorsement issued as provided in Rule P-9b(9)--A premium of $25.00 shall be charged for the issuance of each Endorsement Form T-36 Environmental Protection Lien provided for in Rule P-9b(9).

  8. Endorsement issued as provided in Rule P-9b(10)--A premium of $25.00 shall be charged for the issuance of the Endorsement Form T-39 Balloon Mortgage Endorsement provided for in Rule P-9b(10) if the endorsement is issued at the time of the issuance of the loan policy. A premium of $50.00 shall be charged for the issuance of the endorsement provided for in Rule P-9b(10) if the endorsement is issued subsequent to the issuance of the loan policy.

  9. Endorsement issued as provided in Rule P-9b(11)--When the First Loss Endorsement (Form T-14) is issued with a Loan Policy of Title Insurance (Form T-2) in accordance with Rule P-9 b(11), the premium for the First Loss Endorsement (Form T-14) shall be $25.00.

  10. Endorsement issued as provided in Rule P-9b(13)--When the Loan Policy Aggregation Endorsement (Form T-16) is issued with a Loan Policy of Title Insurance (Form T-2) in accordance with Rule P-9b(13), the premium for the Loan Policy Aggregation Endorsement (Form T-16) shall be $25.00.

  11. Endorsement issued as provided in Rule P-9b(14)--When the Planned Unit Development Endorsement (Form T-17) is issued with a Loan Policy in accordance with Rule P-9b(14), the premium for the Planned Unit Development Endorsement (Form T-17) shall be $25.00. If the Company issues the Planned Unit Development Endorsement (Form T-17) on two or more title insurance policies which are issued simultaneously covering the same land, then the premium for the Planned Unit Development Endorsement (Form T-17) shall be charged only for one Planned Unit Development Endorsement (Form T-17).

  12. Endorsement as provided in Rule P-9b(15)--When the Condominium Endorsement (Form T-28) is issued with a Loan Policy in accordance with Rule P-9b(15), the premium for each Condominium Endorsement (Form T-28) shall be $0.00.

    Effective January 3, 2014 (Order 2806)


Title Manual Main Index | Section III Index

R-12. Commitment for Title Insurance

Applicable only as provided in Rule P-18 - The Commitment for Title Insurance shall bear no premium in addition to the premium chargeable for the policy or policies issued pursuant thereto, except that this Rule R-12 shall not apply to any commitment for title insurance issued pursuant to Rate Rule R-23, or Rate Rule R-25.


Title Manual Main Index | Section III Index

R-13. Mortgagee Title Policy Binder on Interim Construction Loan

  1. Applicable only as provided in Rule P-16 - A premium charge of an amount equal to the minimum policy Basic Premium Rate shall be made for issuance of each Mortgagee Title Policy Binder on Interim Construction Loan. Such Binder shall be issued for a term of one year. The original Binder may be extended for six (6) additional consecutive periods of six (6) months each, not to exceed thirty-six (36) months. A premium of $25.00 shall be charged for each consecutive six (6) month extension.

  2. Upon subsequent issuance of:

    1. a Mortgagee Policy on a loan to fully take up, renew, extend or satisfy a lien already covered by a Mortgagee Title Policy on Interim Construction Loan, or

    2. an Owner's Policy on the sale of a property which is encumbered by a lien covered by a Mortgagee Title Policy Binder on Interim Construction Loan and which lien against the conveyed property is released prior to or simultaneous with the sale, the premium for the new policy shall be at the basic rate, but a credit for the premium paid for the Binder shall be allowed to the purchaser of the Owner's Policy as follows:

      Fifty percent (50%) of the premium paid for the Binder (exclusive of extensions), if the subsequent policy is issued within one (1) year from the date of the original Binder.

    Where more than one Policy may be issued on a portion of the property covered by the Binder, only one credit shall be allowed, being on the first Policy issued.

    This Rule shall not apply to any Binder issued prior to March 1, 1989, in which case no credit is allowed.

    Notwithstanding the provision in Rate Rule R-1, it shall be permissible to combine this rule with Rate Rule R-5 in the calculation of the premium for a Policy. In no event shall the premium collected be less than the regular minimum promulgated rate for a Mortgagee Policy.

    The fifty percent (50%) credit shall not apply if the Binder covers real property which is being improved for improvements other than one to four residential units.


Title Manual Main Index | Section III Index

R-14. Foreclosed Properties

When the owner of the property has acquired same directly through foreclosure under a mortgage insured by a Mortgagee Policy, or the Secretary of Housing and Urban Development or the Administrator of Veteran's Affairs, or as their names may be changed from time to time, has acquired said property be reason of its guarantee or endorsement of a mortgage insured by a Mortgagee Policy, and is selling same, an Owner Policy may be issued on said sale, or a Mortgagee Policy may be issued on a lien being retained in the deed conveying said property. If only an Owner Policy is issued, the charge therefore shall be at the Basic Rate on the full amount of the consideration of said sale. If only a Mortgagee policy is issued, the Basic Rate on the full amount of the lien shall be charged. In either case, the credit of $15.00 on the entire transaction shall be allowed. In the event an Owner Policy and a Mortgagee Policy are issued simultaneously on a transaction as provided in Rule R-5, the simultaneous issue rate, as well as the credit allowed by this rule, shall apply. The $15.00 credit allowed by this rule shall not apply until the issuing Company is furnished the following:

  1. At the time the policy or policies are ordered, the seller will transmit to the Company, for its examination and use, such evidence as is available in the seller's files, including the Mortgagee Policy covering the lien foreclosed, showing title vested in such seller. This title evidence must be retained in the files of the Company for future reference in the event a claim arises under the indemnity agreement set forth in paragraph "b" hereof.

  2. The seller of the property must convey by General Warranty Deed, or agree to save harmless and indemnify the Company for losses the Company may sustain as a result of any of the following:

    1. Defects, liens or encumbrances of title created prior to the date of recording of the deed conveying title to said seller, and not shown as exceptions to title in the title evidence furnished to the Company by said seller.

    2. Unfiled mechanic's and/or materialmen's liens.

    3. Rights of parties in possession.

  3. the seller will not be required to indemnify the Company for errors and omissions previously made in policies previously issued by that Company.


Title Manual Main Index | Section III Index

R-15. Owner's Policy Endorsements

  1. Increased Value - When requested by the Insured, and upon compliance with Rule P-9a(2), endorsement form T-34 shall be attached to the Owner's Policy upon payment of a premium for such endorsement which shall be the Basic Rate computed on the new amount less the premium paid for the Owner's Policy and any form T-34 endorsements previously attached thereto, but in no event less than the then applicable minimum policy Basic Premium Rate.

  2. Increase in Coverage During Construction - A premium of $50.00 shall be charged for each T-3 Endorsement issued according to Instruction VIII, as provided in Rule P-9a(3).

  3. Manufactured Housing Unit - A premium of $50.00 shall be charged for each T-31.1 Endorsement issued, as provided in Rule P-9a(4).

    Effective January 3, 2014 (Order 2806)

Title Manual Main Index | Section III Index

R-16. Amendment of Exception as to Area, Boundaries, etc.

Applicable only as provided in Rules P-2 and P-8.a.(2) - the Exception as to area and boundaries, etc., may be amended in an Owner or Mortgagee Policy upon the payment of an additional premium (in the case only of an Owner Policy) therefore equivalent to (1) 15% of the Basic Rate in an Owner Policy (T-1), or (2) 5% of the Basic Rate in a Residential Owner Policy of Title Insurance - One-to-Four Family Residences (Form T-1R), with a minimum premium of $20.00.

Title Manual Main Index | Section III Index



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