ALTA 6.2 is designed
for use when negative amortization is a
feature as it provides for the loss of priority of the lien of the insured
mortgage by reason of “interest on
interest” or where unpaid interest is to be
added to the unpaid balance of the loan. Because the charging of “interest on
interest” may not be permitted in a number of
states, lenders require specific assurances for that matter. The use of this
endorsement, however, is limited to states in
which interest on interest is legal. If
you have any further question in the use of any of these endorsements, contact
Agents National Title’s underwriting counsel.
A sample ALTA Endorsement 6.2 form.