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SpotlightAttorney Spotlight 
 
Ethan Smith
Ethan W. Smith, Esq.

Ethan focuses his practice in business law, with an emphasis on commercial lending, government guaranteed lending, mergers and acquisitions, real estate, contracts, commercial and corporate law. He is a closing attorney for various lenders nationwide. Ethan is also a designated closing counsel for several Certified Development Companies that operate in Pennsylvania, New Jersey and Delaware. In addition to representing commercial lenders, Ethan represents and counsels a number of small businesses in a variety of contexts, including mergers and acquisitions, corporate governance, and contract and real estate matters.

As a closing attorney for commercial lenders, Ethan prepares and reviews loan files for conventional, SBA 7(a) and 504, and USDA B&I loans, confers with loan processors and in-house counsel, and drafts, analyzes and negotiates loan documents. He has closed hundreds of government guaranteed commercial loans through the SBA 7(a) and 504 loan programs, through the USDA B&I program, and has closed numerous conventional commercial financing transactions, including asset-based, real estate, and factoring arrangements. Ethan has closed numerous complex commercial transactions, often involving multi-jurisdictional issues and collateral. As a licensed title agent in Pennsylvania and New Jersey, Ethan provides title insurance for commercial projects including purchases, refinancing and ground up construction. Through his underwriters' national networks, Ethan coordinates title insurance, escrow and closing services for his clients nationwide.


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Feature 

Title Insurance: 

Alternatives to the Standard Endorsements

By Amy R. Brownstein, Esq. 

amy
Amy R. Brownstein, Esq.
   

 

         When title insurance is required as part of a loan transaction, the standard endorsement request is for ALTA Endorsements 6 (Variable Rate Mortgage), 8.1 (Environmental Protection Lien) and 9 (Restrictions, Encroachments, Minerals).  There are variations of each of these endorsements, however, and it is advisable to consider whether the "non-standard" form of any of these endorsements should be obtained for a particular loan.  


         The ALTA Endorsement 6 provides coverage against loss or damage resulting from the invalidity or unenforceability of the lien of the insured mortgage resulting from changes in the interest rate, as well as the potential loss of priority of the insured mortgage resulting from those changes.  Lenders should consider whether the ALTA Endorsement 6.2 (Variable Rate-Negative Amortization) might be preferable for certain loans.  In addition to the coverage provided under the ALTA Endorsement 6, the ALTA Endorsement 6.2 also provides coverage against invalidity or unenforceability resulting from interest on interest and the addition of unpaid interest to the principal balance of the loan, as well as the potential loss of priority resulting from these events.  This additional coverage may provide additional protection for lenders who add unpaid interest to the principal balance, which may be considered a type of negative amortization.


         The ALTA Endorsement 8.1 insures against loss or damage sustained by reason of the failure of the insured mortgage to have priority over a recorded environmental protection lien, excluding liens that are shown as exceptions in the title policy or are provided by specified state statutes.  This form includes a statement that "the insurance afforded by this Endorsement is only effective if the land is used or is to be used primarily for residential purposes."  Therefore, when making commercial loans on property that is not residential, lenders must be sure to require the removal of this limitation, or request the ALTA Endorsement 8.2, which also provides coverage against recorded federal or state environmental protection liens but is intended for commercial property.


         The ALTA Endorsement 9 provides coverage against the existence or violation of restrictions on the property that could impair the priority or divest the lien of the mortgage, encroachments of improvements onto adjacent property, and damage to existing improvements in certain circumstances.  The ALTA Endorsement 9.3 extends the coverage for damage to improvements resulting from the exercise of mineral rights to future improvements, in addition to existing improvements. This additional coverage may be particularly useful in connection with construction loans when the rights of non-parties to the transaction to extract minerals from the land have been excepted from title insurance coverage.


         As is always the case with title insurance, keep in mind that endorsement forms and numbers may vary from state to state, so sometimes understanding the substantive variations of the endorsement forms is the best way to make sure that you get the best coverage for a particular transaction.

 

         For more information on endorsements and other title insurance related matters, contact Amy at [email protected] or 215-542-7070.




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knowDid you know...

 Compass

...that Starfield & Smith, P.C. helps lenders nationwide preserve and protect the SBA guaranty?  From eligibility issues, to documentation and closing, to servicing and liquidation, we assist lenders that place a premium on protecting the guaranty.

 

For more information about this and other services Starfield & Smith, P.C. provides its clients, please call Ethan at 215-542-7070 or by email at [email protected].
  
SeminarSeminars and Events
  
SBA Loan Guarantees:
Current Purchase Issues and Complexities

Presented by: Lorman
Date: December 8th, 2010
Time: 1:00 pm - 2:30 pm EST
Location: Webinar
 

In the current economy, many lenders are looking to the credit enhancement offered by the U.S. Small Business Administration's government guaranteed lending programs to keep capital flowing to America's small businesses. While the many benefits of the programs may be appealing to lenders an understanding of the guaranty purchase process and the pitfalls which lenders fall victim to, resulting in discounts and denials of these same loan guarantees, is more important now than ever. As the oversight standards of the SBA tighten, you need the knowledge to ensure their loan guarantees will be honored by the SBA.


To see a brochure for this event, click here

Register online here.
Or call 1-866-352-9539
When registering, use priority code 15800 and discount code F2716129.


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ContactInfo Starfield & Smith, P.C.
Pennsylvania Office
501 Office Center Drive,
Suite 350 | Ft. Washington, PA 19034
phone: (215) 542-7070 | fax: (215) 542-0723
 
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1516 West Lake Street, Suite 303 | Minneapolis, MN 55408
phone: (612) 208-0877 | fax: (215) 542-0723

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