NY TIRSA Additional Interest Endorsement Guideline 1995

Explanation:

Purpose Of Endorsement:
This endorsement provides assurances to the lender that the provision calling for additional interest is valid, and shares the same priority as the principal of the loan secured by the mortgage. The amount of the additional interest is not insured, although the amount of additional coverage purchased provides a ceiling for what the Company can be held to cover.

Underwriting Requirements:

Requirements For Issuance:
(a) Underwriter approval is required prior to issuance (this is a requirement of the New York State Insurance Department). If a lender is offering a shared appreciation mortgage (SAM) program, a blanket approval can be obtained, provided the loan documentation is on standardized forms which have been reviewed by the Company;
(b) Company Counsel must review the loan documentation since the circumstances which would permit the issuance of this endorsement are diverse, and underwriter approval is required, specific requirements are not set forth;
(c) The loan documentation must provide for additional interest which is not a prepayment penalty, and the transaction is not a reverse mortgage or swap.
Issued With The Following Policies:
Mortgage policies only where a mortgage contains provisions for shared appreciation, a so-called equity kicker, a percentage of receipts, or other type of additional interest, but not including a reverse mortgage or swap, which have special endorsements.
Premium:
Regular rate per thousand of insurance for coverage over the face amount of the loan.