Before issuing the endorsement, the following requirements must be met:
1. State law must provide for the priority of revolving credit future advances to relate back to the original mortgage.
2. The security instrument must comply with the provisions contained in items 1-4, above.
3. Even though the advances may be provided for under a separate agreement, the recorded security instrument must state that it secures future advances.
4. The following pending disbursement clause must be listed in the commitment and final policy:
“Pending disbursement of the full proceeds of the loan secured by the commitment /policy herein, the Company insures only to the extent of the amount actually disbursed but increases as such disbursement is made in good faith and without knowledge of any defects in, or objections to the title up to the face amount of the commitment/policy.”
The Company has several revolving Credit Endorsement which are state specific. Before issuing this endorsement, contact your local Agents National Title underwriting counsel.