STG Assignment of Rents Endorsement Guideline 1

Explanation:

Lenders occasionally request that the loan policy insure certain recorded interests that are taken as additional security to the insured mortgage. The most common additional security interest, other than a security interest under the Uniform Commercial Code, is an assignment of rents (leases).

Underwriting Requirements:

(1) This endorsement is to be used to provide certain coverages with respect to a separate assignment of rents (leases). If the assignment appears in the mortgage instrument, the "Assignment of Rents Endorsement (contained in mortgage)" should be used.
(2) The endorsement provides insurance that the assignment of rents (leases) is properly executed and that the public records do not disclose any prior assignments of these same rents (leases).
(3) The assignment of rents (leases) must be properly executed by the owner of the estate or interest covered by the insured mortgage and there must not be any prior assignment of rents of record or same must be excepted in Schedule B of the policy.
(4) Prior mortgages or deeds of trust must be examined to determine if they contain assignments of rents or leases. Separate Schedule B Exceptions should be made for such assignments.