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In the Spotlight
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Jennifer focuses her practice on government guaranteed and conventional commercial lending transactions. She has substantial experience counseling clients in connection with:
- SBA 7(a) loan processing, documentation, closing and funding
- SBA 504 loan processing, documentation, closing and funding
- SBA franchise eligibility analysis
- SBA rules and regulations
- Guaranty repurchase matters
- Conventional loan processing, documentation, closing and funding
Jennifer has also assisted small business clients with a wide variety of corporate governance and transactional matters such as:
- Entity formation
- Purchase/sale of business
- Lease agreements
- Stock Purchase Agreements
ADMISSIONS:
To read more about Jen, click here.
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FEATURED ARTICLE
Best Practices: Title Insurance: Keeping up with Endorsements
By: Amy R. Brownstein, Esquire
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| | Amy R. Brownstein, Esquire |
When obtaining a lender's title insurance policy, it is common for a lender to ask for ALTA Endorsements 6 (Variable Rate Mortgage), 8.1 (Environmental Protection Lien) and 9 (Restrictions, Encroachments, Minerals) without giving too much thought to those forms. However, title insurance is not constant; the insuring forms are revised over time. Failing to give the substance of the endorsements due consideration may result in a failure to obtain the desired coverage.
One endorsement that requires particular consideration is the ALTA 9 endorsement. After an adverse judgment resulted from a court's broad reading of the ALTA 9 endorsement -- providing insureds with greater coverage than the title industry intended -- the ALTA 9 endorsement was revised, and new variations of the ALTA 9 created. Now, lenders must consider the coverage that is needed and request it specifically. Requesting an "ALTA 9" may no longer be enough.
An excellent example of the reallocation of coverage among several ALTA 9 endorsements is the creation of the ALTA 9.6 endorsement, which includes the following coverage:
"The Company insures against loss or damage sustained by the Insured under this Loan Policy if enforcement of a Private Right in a Covenant affecting the Title at Date of Policy (a) results in the invalidity, unenforceability or lack of priority of the lien of the Insured Mortgage, or (b) causes a loss of the Insured's Title acquired in satisfaction or partial satisfaction of the Indebtedness."
The endorsement defines "Private Right" as "(i) a private charge or assessment; (ii) an option to purchase; (iii) a right of first refusal; or (iv) a right of prior approval of a future purchaser or occupant;" a "Covenant" is "a covenant, condition, limitation or restriction in a document or instrument recorded in the Public Records at Date of Policy." An earlier version of this coverage was previously included in the ALTA 9 endorsement, but if you examine the version of the ALTA 9 endorsement in use today, you will find it is no longer there. Thus, to obtain this coverage, an ALTA 9.6 endorsement must be specifically requested.
What should a lender do to make sure it obtains appropriate coverage? When reviewing a title commitment, look at both the exceptions that have been raised and copies of the recorded documents referenced in the commitment. Identify those matters that create risk and determine whether coverage is available for those specific items. Many of the major title underwriters make endorsements forms available on their websites; these endorsements can be reviewed to identify available coverage for specific issues. In addition, the closing title company or agent can advise if coverage is available for particular issues.
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, please contact Amy at abrownstein@starfieldsmith.com or at 267-470-1187.
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EVENTS & SEMINARS
Avoiding Lender Liability
Presented By: SBA Date: April 21, 2015 @ 10:00am EST Location: Webinar
For more information about this event and/or to register, click here.
SBA Lending Technical Conference
Advanced SBA Documentation and Closing
Date: May 4 - 5, 2015 Location: San Antonio, Texas
For more information about this event and/or to register, click here.
Avoiding Lender Liability
Presented By: SBA
Date: May 12, 2015 @ 10:00am EST
Location: Webinar
For more information about this event and/or to register, click here.
Exploring the SOP
Presented By: SBA
Date: May 19, 2015 @ 10:00am EST
Location: Webinar
For more information about this event and/or to register, click here.
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Fredda K. Morgan / SBA Administrator - Banking Officer / Green Bank
I have known and worked with David Starfield and Ethan Smith since the mid 90's. The SBA market has seen many changes over the years and in every aspect of my association with them, from processing to liquidation, they and their firm have proven to be experienced, knowledgeable and professional. I wouldn't be where I am today without them showing me the way. I refer anyone to them that is in need of their services.
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