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The American Land Title Association (ALTA) represents title insurance companies and their agencies nationwide on a variety of industry and legislative issues. Members of the association search and insure land titles to protect real estate investors, including home buyers and mortgage lenders. The ALTA Title Insurance Forms Committee has been engaged in a baseline review of the core ALTA title insurance policy form, the ALTA Loan Policy (10/17/92), for more than one year. This effort was undertaken for a number of reasons. The current loan policy was first adopted in 1987 with only one narrow change since. With the many changes in the mortgage finance marketplace as well as in the title industry itself, the mere passage of time would suggest the need for such a review. However, the focus of this review has been somewhat different from past examinations of the base policies. In the past, revisions of the base policies have been prompted by adverse legal developments that have placed in doubt the intentions of the industry as expressed in the policy, or to respond to legislative developments that also placed the title insurer at risks not anticipated under the existing policy language. Naturally, such concerns are always present and have been considered in this draft as well. But the focus, as indicated in the draft itself, has been more toward a reorganization and expression of the title insurance risks undertaken by the title insurer. In the past, generically stated insuring provisions, eight in the loan and four in the owner’s policies, set forth that undertaking. Many insureds were unclear as to whether such basic matters as forgeries, misindexed documents, incompetency of parties to the transaction and limited survey issues were covered under these more generally stated provisions. Moreover, important affirmative coverage had been placed in the current loan policy’s exclusions from coverage, which both obscured these valuable protections and raised questions under recent case law about their continued effectiveness. In short, it was the view of the committee that, in many ways, the current title policy itself wasn’t effectively expressing the full range of benefits the product actually offered. Proposed changes in the conditions and stipulations, the “boilerplate” contractual provisions of the policy, include an expanded definition of “insured.” These provisions, dealing with the rights and obligations of and between the insurer and the insured, include significant changes and additions in policy term definitions that should be of interest to commentators. ALTA has developed title insurance policy and endorsement forms for more than 85 years. ALTA’s practice is to produce exposure drafts by the ALTA Title Insurance Forms Committee, which are broadly distributed to all interested parties including the ALTA active membership, governmental agencies, prominent members of the real estate bar, academics and other interested parties. Comments are requested from all parties and, when appropriate, discussions will be held with representatives of interest groups with significant concerns. Ultimately, comments and concerns are reviewed by the committee and a form is recommended to the ALTA board of governors for adoption. It is expected that this current loan policy project will continue throughout 2005, with a likely adoption date sometime in 2006. It is also expected that subsequent drafts of the form will be posted on the ALTA Web site for comments and all interested parties duly notified. James R. Maher is the executive vice president of the American Land Title Association. He encourages readers to provide comments on this draft to him at [email protected]. To view a copy of the draft, go to the ALTA Web site at www.alta.org and see the item on “Draft ALTA Loan Policy” under “ALTA News.”

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