Bulletin: NJ2012003

Dear Associates:

Effective March 2, 2012, the New Jersey Department of Banking and insurance has withdrawn the Residential Owner’s Policy, approved the use of four new forms, and made technical corrections to eight existing forms. This bulletin will outline the changes.

The ALTA "Plain Language" Residential Title Insurance Policy (dated 6/1/1987) (NJRB 1-15) has been withdrawn and is no longer available.  The 2006 ALTA Owner’s Policy form, which has been the default owner’s policy form is now the standard form and the only owner’s policy available other than the "enhanced" ALTA Homeowner's Policy (dated 01/01/08) (NJRB 1-16).

The Department has approved the use of the ALTA 31-06 Severable Improvements Endorsement (NJRB 5-133). This endorsement provides coverage against loss associated with the removal or relocation of a severable improvement as well as the diminution of value of the insured’s interest in the improvement resulting from a defect, lien, encumbrance or other covered matter in the policy. The charge for this endorsement is 20% of the applicable underwriting charge with a minimum charge of $500.00.

Also Approved is the ALTA 33-06 Disbursement Endorsement (NJRB 5-134). This endorsement is designed to be issued in connection with loan policies insuring a construction mortgage where an ALTA 14 Series is being issued. This endorsement down dates the policy to the date of the advance and increases the policy coverage by the amount of the draw. The charge for this endorsement is $150.00 plus $45.00 for each rundown along with applicable pass through charges.

The ALTA 29-06 series (Swap Endorsements) have been expanded with two new forms. The first is the ALTA 29.2-06 Interest Rate Swap Endorsement - Direct Obligation-Defined Amount (NJRB 5-134).  This Form further defines the term, "Additional Amount of Insurance". The second is the 29.3-06 Interest Rate Swap Endorsement-Additional Interest - Defined Amount (NJRB 5-136), which further defines the term, "additional interest". The charge for these endorsements is the same as the others in the 29-06 series: 5% of the applicable rate at issuance and 10% thereafter.

The ALTA 13-06 Leasehold Owner’s endorsement has been amended to clarify the definitions of "Leasehold Estate, "Lease Term" and "Personal Property" as well as a further delineation of the costs included in computing loss under the terms of the endorsement. The ALTA 13.1-06 Leasehold Loan endorsement was modified in the same fashion as the ALTA 13-06 and has undergone some grammatical changes as well.

The ALTA 14.06 Future Advance Priority, ALTA 14.1-06 Future Advance-knowledge, ALTA 14.2-06 Future Advance-Letter of Credit, and the ALTA 14.3-06 Future Advance-Reverse Mortgage, have had grammatical changes adopted and minor stylistic errors corrected.  Substantively, however, the forms remain the same.

Grammatical changes have also been made to the ALTA Short Form Expanded Coverage Residential Loan Policy and the ALTA Short Form Residential Loan Policy which do not impact upon coverage.

If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.

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