VA Pending Disbursement Clause (“RESTPEND”)

STEWART TITLE GUARANTY COMPANY

PENDING DISBURSEMENT CLAUSE (“RESTPEND”)

Pending disbursement of the full proceeds of the loan secured by the Mortgage or Deed of Trust described in Schedule “A” hereof, this policy insures only to the extent of the amount actually disbursed. This policy insures against any loss or damage which might result from claims of mechanic's liens arising from nonpayment of bills for labor performed or material furnished prior to __________________, but said coverage is limited to mechanic's liens relating to those amounts actually paid and only to mechanic's liens by those persons or entities receiving said payments directly pursuant to written disbursement authorization by Insured to Company and approved by the Insured herein; except any such liens or notices thereof as may be recited under Schedule B hereof. At the time of each disbursement of proceeds of the loan, an endorsement to this policy must be secured increasing the amount insured hereunder up to the face amount of the policy, subject to the following requirements being met before issuance of such endorsement that: (a) the company is furnished evidence from the insured certifying that the disbursement has been made in good faith and without knowledge of any defect in, or objection to the title, (b) a title search by the Company reveals no liens, objections or any other adverse changes in the title, (c) the contractor and owner furnish this company satisfactory paid bills, lien waiver, or other evidence that all items from which a lien might arise, have been paid or otherwise satisfied, and (d) the owner and Contractor furnish the Company satisfactory Affidavit and Indemnity Agreement(s) as to the matters referred to in (c) above.

This policy does not insure against mechanic's liens for labor performed and materials furnished subsequent to the last date to which mechanic's lien coverage has been extended, nor does this policy guarantee completion of the improvements in progress, or their compliance with plans and specifications. The company in no way guarantees the sufficiency of the mortgage proceeds as adequate to complete said improvements.

Notwithstanding any other language contained in the insuring provisions of this policy, the above provisions are the sole provision applicable to the extension of coverage for loss or damage resulting from mechanic's liens or claims of such hens not of record.

This endorsement is made a part of the commitment or policy. It is subject to all the terms of the commitment or policy and prior endorsements. Except as expressly stated on this endorsement, the terms, date, and amount of the commitment or policy and prior endorsements are not changed.

Disbursement Endorsement Example 2

ENDORSEMENT TO TITLE POLICY
SERIAL NUMBER M

FILE NO: ____________

ISSUED BY
STEWART TITLE
GUARANTY COMPANY
HEREIN CALLED THE COMPANY
DISBURSEMENT ENDORSEMENT EXAMPLE 2 - VIRGINIA
(RESTPEND)

IT IS HEREBY AGREED AND UNDERSTOOD THAT THE ABOVE TITLE POLICY IS AMENDED TO READ AS FOLLOWS:

The following exceptions are hereby added to Schedule B, of said Policy:

Note: Taxes are not further examined.

Policy Extended To:

PLAN "B-1 (mod)"
BUILDER/GENERAL CONTRACTOR DISBURSEMENT
(MODIFIED)

I.                                                               I.  BUILDER SUBMITS REQUISITION TO LENDER PRIOR TO DRAW. AGENT OBTAINS COPY OF REQUISITION WITH SUPPORTING INVOICES

II.                                                             II.  REVIEW INVOICES TO DETERMINE:

1. THEY ARE CURRENT

2. THEY ARE ONLY FOR WORK PERFORMED ON YOUR PROJECT

 (THE BUILDER/GENERAL CONTRACTOR CAN ASSIST YOU BY

PROVIDING A LIST OF PAYABLES FROM THEIR COMPUTER THAT CAN SIMPLY BE MARKED UP TO INDICATE WHAT IS BEING PAID OUT OF THIS SPECIFIC DRAW.)

III.                                                           III.  THE LIST MUST CONTAIN THE FOLLOWING:

               NAME OF SUBCONTRACTORS/SUPPLIERS                                  $AMOUNT OF CHECK

                    (LINE BY LINE)                                        -.                                            (INCLUDE CHECK#'S)

                TOTAL HARD COSTS                                                                                $TOTAL OF SUB/SUPPLIER CHECKS

                    TOTAL SOFT COSTS                                                                             $TOTAL SOFT COSTS

                    (YOU MUSTHAVE A BREAKDOWN IN

                    YOUR FILE ACCOUNTING FOR THESE FUNDS)

      TOTAL AMOUNT OF DRAW                                                                     $SOFT & HARD COST TOTAL

IV. PRIOR TO NEXT DRAW YOU MUST HAVE ALL SUBCONTRACTOR/SUPPLIER LIEN WAIVERS IN HAND.                                                                                                                  

Possible coverage for an owner during the construction phase; please obtain prior approval from STGC:

[old Exhibit X form]

AS TO THE PROPOSED OWNER’S POLICY:

“Pending such time as the improvements contemplated upon the insured premises shall be commenced, liability hereunder shall be limited to $ ______________, the purchase price paid for the land; but as and when the erection of such improvements shall be commenced, liability hereunder shall increase, as the improvements progress, in the amount of the cost thereof, up to the face amount of this Commitment or Policy.”