Should your lender request that the creditors rights exclusion [ALTA Loan Policy (Exclusion #7] be deleted from an ALTA policy, such deletion must be in the form of an endorsement, rather than through affirmative insurance stated in the policy. In order to provide such an endorsement to a loan policy, it is necessary to determine that the transaction is supported by adequate consideration. In situations where you are considering removal of the exclusion by endorsement, you must contact Agents National Title underwriting counsel for authorization.
• Property is conveyed or mortgaged without apparent consideration when there are lawsuits pending against the seller
• Property is conveyed from debtor to self and spouse as tenants by the entirely just prior to a judgment or lawsuit being filed against the seller
• Several lawsuits/judgments are pending against the debtor and the debtor executes a promissory note securing a previous debt
• There is a leveraged buyout situation.
Should you suspect that a transfer or mortgage of property is being made for the purpose of defrauding a creditor, consult Agents National Title underwriting counsel immediately.