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Home > Underwriting > TIRSA Rules > SECTION 16 - MODIFICATION

SECTION 16 - MODIFICATION OF AN INSURED LOAN (including Construction Loan Insurance)

  1. For endorsements to existing loan policies, or new policies insuring previously insured mortgages modified or assigned within ten years from the date of closing, where there has been no change of ownership of the mortgaged interest and the property is identical and no increase in the outstanding principal balance, the charge shall be fifty percent (50%) of the applicable loan rate based on the outstanding principal balance of the mortgage.

    The provisions of this sub-section DO NOT apply to the final conversion of a Construction Loan Mortgage as outlined in Sections 12 (B), (C) or (D).

  2. A 30% of the applicable loan policy rate (or 70% discount) and a ten year period shall apply to a mortgage modification transaction, where ALL of the following conditions are met:

    1. The Borrower is a Public Benefit Corporation or a Not-For-Profit IRC Section 501(c)(3) Organization;

    2. The Lender does not change, is a Public Benefit Corporation, and requires only assurance that its mortgage priority, validity and enforceability have not changed because of the modification;

    3. The mortgage is neither sold nor packaged but, throughout the life of the loan, remains in the Lender's portfolio;

    4. The amount of the mortgage loan modified exceeds $1 million, measured by its outstanding principal balance; and

    5. The only modification is a change in the mortgage loan interest rate, and any accompanying changes necessary to reflect that change in interest rate.

  3. An existing loan policy may be endorsed by issuance of the TIRSA Successor in Ownership of Indebtedness Endorsement (Loan Policy) (8/15/94) at a charge of $25, upon application of a party representing that it has succeeded to the ownership of the indebtedness secured by the insured mortgage. Such endorsement, however, shall not extend the effective date of the policy nor insure the validity, form, or sufficiency of the assignment.

  Copyright 2006 by Monroe Title Insurance Corporation