Commonwealth Land Title Insurance Company, NCS

ALTA ENDORSEMENTS - 278 - SAMPLES AND DESCRIPTIONS COMMERCIAL LENDER GROUP – FORM 42-06 The ALTA Loan Policy is designed for a single lender as the Insured and owner of all of the Indebtedness. However, in many commercial mortgages, a group of lending institutions participate in funding the Indebtedness, and many participants ask for an acknowledgment in the policy of their participation. The policy defines Insured as “the owner of the Indebtedness and each successor in ownership of the Indebtedness” but does not indicate how this may work if there is more than one owner of the Indebtedness. The ALTA 42-06 (Commercial Lender Group) defines ‘Lender Group’ and ‘Participant’ and designates Participants as Insureds, so the policy will describe the lending structure. The definition of Participant carves out a “non-insured obligor,” so the borrower cannot become an Insured. Section 3 of the endorsement gives coverage for changes in the composition of the Lender Group with respect to the validity, enforceability and priority of the Insured Mortgage. Finally, Section 4 of the endorsement parallels Condition Section 1(e)(ii), in the definition of ‘Insured,’ to reserve all rights and defenses that the Company has against any Insured as to any Participant unless the Participant acquired its portion of the Indebtedness without Knowledge of the matter asserted in a claim. The ALTA 42-06 only applies to transactions if the land is not developed with a one-to-four family residential dwelling so it may not be used to insure secondary market loan structures. This endorsement is for Loan Policies only. ALTA Endorsement — Form 42-06 (Commercial Lender Group Endorsement – 12/2/13) Form 42-06 Commercial Lender Group