The Balloon Mortgage Endorsement, (CLTA form 111.9) was created by the California Land Title Association. Although is it often requested by lenders, this endorsement is not an ALTA approved form and may not be permitted in certain states.
The endorsement insures lenders against loss by reason of the invalidity, unenforceability, or loss of priority of the lien of the insured mortgage resulting from the those provisions contained therein in the event the borrower exercises his Conditional Right to Refinance a balloon mortgage and changes in the rate of interest.