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March 4, 2010 |
Title Insurers to End Creditors' Rights Coverage Nationwide, but the Issues for Lenders RemainOn February 3, 2010 the Board of the American Land Title Association ("ALTA") approved "de-certification" of the "Creditors' Rights Endorsement" which ALTA had promulgated for use with its current forms of title insurance policy. In announcing this decision ALTA, the trade association for the title insurance industry, noted that "Each title insurer is free in each transaction to agree to issue any creditors' rights endorsement or other coverage or not to issue such an endorsement". Despite the fact that lack of a certified ALTA endorsement form by itself would not impair any title insurer's ability to issue policies with the formerly certified Creditors' Rights Endorsement or any similar form, several of the nation's largest title insurers, including the insurers in the Fidelity National Title, First American Title and Stewart Title insurance groups, promptly announced that on a company-wide, nationwide basis, they would no longer offer the type of creditors' rights insurance coverage previously embodied in the de-certified ALTA endorsement. It should be noted that certain states, including New York, Texas and New Mexico, in which title insurers are only permitted to issue endorsement forms approved by state regulators, title insurers have been precluded from issuing the Creditors' Rights Endorsement for a number of years. In those states, the recent actions of ALTA and certain title insurers do not change existing practice. ABOUT SCHIFF HARDIN LLPSchiff Hardin's real estate practice covers all aspects of real estate. Our attorneys' experience includes a particular emphasis on real estate development, especially multi-use projects — combining residential, retail, parking and public-use areas. We have handled more multi-use projects than most firms in the United States and understand the variety of things that need to come together to complete a project — things that don't always come together easily in a large project. Our depth of experience enables us to advise our clients through the process of developing these projects in an efficient and cost-effective manner. |