Endorsement

HECM Reverse Annuity Mortgage Endorsements

    To be attached to and become a 

    part of Policy No. ________________ 

    of Old Republic Title Insurance Company.

A.     The Company acknowledges that the insured mortgage secures a reverse annuity against loss or damage sustained by reason of:

1.      The invalidity or unenforceability of the lien of the insured mortgage resulting from the provisions therein which provide for: (a) changes in the rate of interest; (b) interest on interest; or (c) the addition of unpaid interest to the principal balance of the loan.

2.      Loss of priority of the lien of the insured mortgage as security for the unpaid principal balance of the loan, including any unpaid interest which was added to the principal in accordance with the provisions of the insured mortgage, interest on interest, or interest as changed in accordance with the provisions of the insured mortgage, which loss of priority is caused by: (a) changes in the rate of interest; (b) interest on interest; or (c) increases in the unpaid balance of the loan resulting from the addition of unpaid interest.

B.     Notwithstanding paragraph 8(d) of the Conditions and Stipulations of this Policy, but subject to paragraph 7 of the Conditions and Stipulations, the amount of liability of the Company under the above numbered policy shall fluctuate to equal the outstanding principal indebtedness and interest, not exceeding the Amount of Insurance, secured by the insured mortgage as sums advanced, readvanced, paid and repaid pursuant to the terms and provisions of the RAM. Further more, notwithstanding item 3(d) of the Exclusions from Coverage, this Policy insures that the lien of the insured mortgage as it secures sums advanced and readvanced pursuant to and in accordance with the terms and provisions of the RAM after the Date of Policy shall have the same priority over liens, encumbrances and other matters as if such advances had been made as of the original Date of Policy, except for:

1.      Taxes and assessments;

2.      Federal tax liens, notice of which is filed prior to the date of such advances;

3.      Liens or charges created under any environmental protection laws, ordinances or regulations;

4.      Liens, encumbrances, or other maters, the existence of which are actually known to the Insured prior to the date of such advances; or

5.      Any statutory lien for services, labor or material.

C.     Provided, however, this endorsement is subject to the Exclusions from Coverage, the exceptions in Schedule B of the Policy and does not insure the validity, enforceability or priority of the lien if the insured mortgage with respect to:

1.      Any sums advanced after the filing of a petition form relief under the Bankruptcy Code, 11 USC, by, on behalf of or with respect to the mortgagor;

2.      Usury or any consumer credit protection or truth-in-lending law;

3.      Loan advances made in excess of the Amount of Insurance shown on Schedule A;

4.      The failure of the mortgage to state the maximum of principal and interest that it secures;

5.      The expiration of a statute of limitations or period of laches; or

6.      The failure to provide counseling as defined in 26 CFR Part 206 from a housing counseling agency approved by the U.S. Department of Housing an Urban Development.

_____________________

Authorized Office or Agent

ORT Form 3981

Old Republic Title Insurance Group
Three Center Plaza
Boston MA  02108
800-370-6466
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