Guideline: NM FORM 60 Aggregation - Loan Policy Endorsement (7-1-21) and NM Form 60.1 Aggregation – State Limits – Loan Policy Endorsement (7-1-21)

Explanation:

The Aggregation Loan Policy Endorsement is also known as a "tie-in," "cluster," or "spreader" endorsement. In multi-site loan transactions, mortgages securing the debt are frequently recorded in multiple jurisdictions or states, and it is impractical to issue a single Loan Policy for all the covered sites.  The value of each property encumbered by the mortgage may be less than the total amount of the secured debt. This Endorsement aggregates the Amounts of Insurance of each Loan Policy listed in the Endorsement into one Aggregate Amount of Insurance for all Loan Policies listed and creates the same result as a single Loan Policy covering multiple sites. In the event of a loss, this Endorsement permits the insured to take advantage of any increase in the value of a particular property.

This Endorsement is issued with a Loan Policy on commercial transactions. It is not designed to be issued with an Owner's Policy.

NM Form 60 (07-01-21) and NM Form 60.1 contain modifications to align the endorsements to the terms of the 2021 NM Loan Policy (NM Form 2) and is designed to be issued with the 2021 Loan Policy. 

In some circumstances, the Aggregate Amount of Insurance for a particular state may be less than the Aggregate Amount of Insurance for the entire transaction. This may occur, for example, if the Company’s self-imposed or statutory limits for single risks in a particular state are less than the Aggregate Amount of Insurance for the entire transaction or if a particular state requires payment of mortgage recording tax on the nominal amount of debt secured.

NM Form 60 Aggregation Loan Policy Endorsement may be used in situations where the Aggregate Amount of Insurance does not exceed the Company’s self-imposed or statutory limits for single risks in a particular state.  NM Form 60.1 may be used in situations where the Company's self-imposed or statutory limits for single risks in a particular state or mortgage recording tax issues may limit the Aggregate Amount of Insurance for that state.

Underwriting Requirements:

1. A Stewart Title Guaranty Company underwriter must approve issuance of this Endorsement.

2. Two or more Loan Policies must be issued by the Company. 

3. The stated amount of the mortgage or deed of trust that is recorded in each recording office must equal the Aggregate Amount of Insurance stated in the Aggregation Endorsement; i.e., each mortgage, on its own, must be capable of securing the full amount of the secured debt.

4. This Endorsement contemplates that Schedule A of each Loan Policy will state an allocated Amount of Insurance for each specific property. In Section 1 of the Endorsement, insert a list of all aggregated Loan Policies and their specific allocated amounts. This list can include the - allocation for the subject property as well. In Section 3 of the Endorsement, insert the Aggregate Amount of Insurance for all Loan Policies (i.e., the total).

5. In general, use NM Form 60.  NM Form 60.1 may be used if the Aggregate Amount of Insurance for all Loan Policies exceeds the Company's self-imposed or statutory limits for single risks in any state, or if the secured debt in any particular state is less than the Aggregate Amount of Insurance for all Loan Policies. If you use NM Form 60.1, complete both Section 3.a (by inserting the Aggregate Amount of Insurance for all policies) and Section 3.b (by inserting the state-specific Aggregate Amount of Insurance applicable for a particular state or states). Contact the Reinsurance Department to ascertain current statutory or self-imposed single risk limits.

6.  Policies with other title insurance underwriters cannot be aggregated with policies issued by the Company.

Compliance with the underwriting guidelines contained herein in no way obligates Stewart Title Guaranty Company to issue any form or endorsement.