Explanation:
This endorsement to the Loan policy insures against violations of restrictions, encroachments over easements, building lines or property lines, and damage by reason of mineral development. It is similar to the CLTA Form 100 and other comprehensive endorsements. It may not be issued on one-to-four family property. It may not be issued on an owner's policy.
New Mexico title insurance regulations (13 NMAC 14.8.16) must be complied with. You must have an acceptable survey and you may issue this endorsement, only if you are also deleting Standard Exception 3.
Underwriting Requirements:
We require the following:
1. Restrictions:
(a) Review all restrictions. Verify that there are no forfeiture provisions. If there are forfeiture provisions, verify that the forfeiture provisions are expressly subordinate to the lien of the insured mortgage. If forfeiture provisions are not subordinate to the lien of the insured mortgage, delete paragraph 1(a) and paragraph 2.
(b) Review all restrictions. Verify that any maintenance lien is expressly subordinate to the lien of the insured mortgage and that prior assessments are paid before closing. If the restrictions create a maintenance lien and do not expressly subordinate the maintenance lien to the lien of the insured mortgage, you must delete paragraphs 1(a) and 2 of the endorsement.
(c) Review all restrictions. Verify whether the existing use materially violates the restrictions. If the use violates the restrictions, except to the violation in Schedule B.
(d) Review all restrictions. Verify whether the restrictions create maintenance liens, easements, options, or rights of first refusal to purchase. If any of these provisions appear in the restrictions, separately and explicitly except to those provisions in Schedule B. For example, separately except to ”maintenance lien set forth in[describe document].”
2. Encroachments:
(a) Require a survey reflecting the current improvements. Specifically except in Schedule B to any encroachments over building lines, property lines, or easements. This needs to be a specific recitation of all exceptions per the survey (not merely a blanket exception for matters shown on the survey).
(b) If improvements encroach over more than one half of the width of an easement, delete paragraph 3(a) of the Endorsement, unless you secure underwriter approval.
(c) If improvements encroach over adjoining land or onto a road, delete paragraph 4, unless you secure underwriter approval.
(d) If improvements encroach over setback lines by more than one foot, delete paragraph 5, unless you secure underwriter approval.
3. Minerals:
Verify that (1) there are no outstanding minerals (other than royalty interests) by your own back to sovereign search (you may not rely on a starter for this purpose); or (2) surface rights have been waived by the mineral owners and mineral lessees.
4. Notices of Violation of Environmental Covenants:
If a notice of violation of environmental covenant has been recorded, except to it in Schedule B.
[This guideline also applies to NM 50.1, 56, 56.1, 57 and 57.1]