Effective April 1, 2015, the Pennsylvania Department of Insurance (DOI) approved the Title Insurance Rating Bureau of Pennsylvania’s (TIRBOP) filing of Pennsylvania Endorsement 1530, along with the withdrawal of Pennsylvania Endorsement 1010. Title endorsements, such as these, provide additions or limitations of coverage attached to title insurance policies and tailor the policy to fit the needs of the insured for each specific transaction. For lenders, it is important to be aware of this new coverage, and to use it as appropriate.
Pennsylvania Endorsement 1530 is an endorsement for loan title policies, which provides coverage to an insured lender for loss or damage caused by the loss of priority related to future advances made under a loan agreement or note secured by an insured mortgage. This new endorsement also provides variable interest rate coverage. Pennsylvania Endorsement 1530 mirrors the American Land Title Association’s (ALTA) Endorsement 14-06, a form of which has been adopted by many states nationwide.
The now defunct Pennsylvania Endorsement 1010 was a Pennsylvania-specific endorsement. This endorsement provided coverage for revolving lines of credit, mandatory advances made pursuant to mortgages qualifying as "Open End Mortgages" as defined by Pennsylvania state statute and insured the lien priority of such advances. Notably, Pennsylvania Endorsement 1015, which provides insurance for construction loan advances made under an "Open End Mortgage," continues to remain an available option for lenders.
Since the retirement of Pennsylvania Endorsement 1010, Pennsylvania Endorsement 1530 is now the closest equivalent and is a good endorsement for lenders to consider when providing revolving lines of credit secured by a mortgage on real property. The state regulated charge for Pennsylvania Endorsement 1530 is $100.00 when issued with a loan policy insuring 1-4 family residential properties and 10% of the premium for the policy, with a minimum charge of $500.00, when issued with a loan policy insuring other property.
If you have any further questions, please do not hesitate to contact us.
The information contained in this article should not be construed as legal advice, is not a substitute for legal counsel, and should not be relied on as such. For legal advice or answers to specific questions, please contact one of our attorneys.