DATE:  April 4, 2023
TO:  New Hampshire Agents and Approved Attorneys
FROM:  New Hampshire Underwriting Department
RE:  NEW 2021 ALTA Forms Update

The American Land Title Association (ALTA) has introduced a new set of forms approved for use and dated as of July 1, 2021. The new 2021 forms have been filed and approved by the New Hampshire Bureau of Insurance on behalf of Chicago, Commonwealth, and Fidelity National Title Insurance Companies. We have put together the following FAQs regarding the new forms.

When should we start using the new 2021 forms?

Once the forms are available in your settlement software platform, any new commitments should be prepared on the new 2021 forms and the resulting policies issued on the 2021 policy forms.

For existing files with commitments prepared on the “old” 2016 commitment form, those policies should be issued on the “old” policy forms: 2006 Loan or Owner (Standard), or 2010 Homeowner Policy or 2010 Expanded Loan Policy.

There will be a period when both the old jackets and the new 2021 jackets will be available. Please train all policy producing employees to be careful to select the correct jacket version while both are available. The old jackets will be removed shortly, please catch up on any old policies that need to be produced as soon as possible.

What is new in the 2021 Commitment?

The 2021 Commitment has minor changes but is specifically designed for use with the new 2021 policy jacket forms. When delivering any Commitment to a lender or buyer it MUST contain all the pages including the full jacket, and the schedule A, B-1, B-2, and Exhibit A. The New Hampshire 2021 Residential Commitment is approved for use in NH, VT, ME, RI, and MA.

What are the new Policy Jacket Forms?

2021 ALTA Owner Policy (standard)
2021 ALTA Loan Policy (standard)
2021 ALTA Homeowner’s Policy (enhanced)
2021 ALTA Expanded Coverage Loan Policy (Current Assessments) (enhanced)
2021 ALTA Short Form Expanded Coverage Loan Policy (Current Assessments) (enhanced)
2021 ALTA Short Form Loan Policy (Current Assessments)

Are there any changes in the Schedules?

Schedule B – Exceptions. There are two changes to the Schedule B-II Exceptions (Commitment) and Schedule B-I Exceptions (Policy) as follows:

Discriminatory Covenants. ALTA has added a note regarding discriminatory covenants which will appear in all the forms as follows:

“Some historical land records contain Discriminatory Covenants that are illegal and unenforceable by law. This Commitment and the Policy treat any Discriminatory Covenant in a document referenced in Schedule B as if each Discriminatory Covenant is redacted, repudiated, removed, and not republished or recirculated. Only the remaining provisions of the document will be excepted from coverage.”

“Survey Exception”. The language of the “Survey Exception” has been revised to match the new jacket definitions as follows:

“The effect on the Title of an encumbrance, violation, variation, adverse circumstance, boundary line overlap or encroachment (including an encroachment of an improvement across the boundary lines of the Land), that would be disclosed by an accurate and complete land title survey of the Land.”

Acreage. We are no longer including a specific exception for Acreage in Schedule B. 2021 ALTA Forms now include a specific exception in the jacket.

Loan Policy, Schedule B-II Subordinate Matters. The language in Schedule B-II of the Loan Policy includes a new paragraph regarding priority of subordinate items included in the policy. This is typically where you would list junior mortgages, matters subordinated to the insured mortgage with a subordination agreement or other instruments that are recorded simultaneously with, but after the Insured Mortgage. The language is as follows:

“Covered Risk 10 insures against loss or damage sustained by the Insured by reason of the lack of priority of the lien of the Insured Mortgage over the matters listed in Part II, subject to the terms and conditions of any subordination provision in a matter listed in Part II:”

Are there changes to the endorsements?

Yes, a handful of endorsements were updated. The existing endorsements filed for use in New Hampshire typically contain the suffix “-06.” The endorsements updated in this 2021 package no longer contain the “-06” designation.

Residential. Agents using a settlement software platform and producing residential policies will continue to check off the applicable endorsements which are incorporated into the loan policy only by reference. The software should default to the correct version.

Commercial. Commercial policies will require a bit more attention because the actual endorsements are attached to the policy rather than just checked off on a list.

If you are finishing up a transaction and issued a 2016 commitment for a 2006 loan or owner policy, you will need to use the “06” version of the endorsement.

If you are working on a new transaction and issued the 2021 commitment, you will use the “new” version of any endorsements updated in 2021 and the “06” version if there is no 2021 version.

If you are modifying a prior Loan Policy with an ALTA 11 series endorsement and/or a change endorsement, you need to match your endorsement forms to the original policy.

Note that not all endorsements changed. Commercial agents, contact our office for endorsements as needed and we will send you the correct versions.

Here is a list of the commonly used NH endorsements and the versions available. Keep this handy to help you identify endorsements appropriate for your transaction and which version to use.

COMMITMENT AND POLICY PREPARATION.

It is important to remember that a commitment is an agreement between the underwriter and the Proposed Insured(s) to enter into a contract of insurance, namely the policy. Like any contract, to be enforceable it must contain all material terms. Two of the material terms that must be considered when using the 2021 Commitment are the: 1) Amount of Insurance; and 2) Name of the Proposed Insured(s).

The Amount of Insurance. Use of the term “to be determined” or “TBD” in place of a dollar amount for the Proposed Policy Amount(s) is not acceptable. Alternatively consider the use of either of the following:

  1. Use an approximate amount of insurance. The customer often does not know the exact purchase price or value of the property or the exact loan amount at the time the initial commitment is requested, but an approximate amount can be used for the Proposed Policy Amount(s).
  2. Use a minimum amount for the proposed amount(s) of insurance. If an approximate dollar amount is not available, then a minimum amount can be used to cap the underwriter’s liability under the 2021 Commitment. The suggested amount is $10,000.00 for residential transactions and $100,000.00 for commercial transactions. The Amount of Insurance should be updated once the actual amount is determined.

The name of the proposed insured(s). Determining the name of the Proposed Insured Owner(s) does not usually present a problem as it can be taken from the purchase and sale contract. However, occasionally, the name of the Proposed Insured Owner(s) is not available when issuing the initial commitment. In these situations, you should use the following phrase in place of a name for the Proposed Insured Owner(s) in the initial commitment:

“Purchaser with contractual rights under a purchase agreement with the vested owner identified at Item 4 below.”

Commitments for Loan Policies should not be issued without the name of the Proposed Insured Lender. However, if the situation requires that you do so, you may issue the commitment with the following language in place of a name for the Proposed Insured Lender in the initial commitment:

Purchase. “Lender with contractual obligations under a loan agreement with the Proposed Owner identified at Item 2 above.”

Refinance. “Lender with contractual obligations under a loan agreement with the vested owner identified at Item 4 below.”

Once the Name of the Proposed Insured(s) is provided by the customer, the 2021 Commitment should be updated to reflect the actual name(s) of the Insured(s).

PROCEED WITH CAUTION: the 2021 Commitment terminates 180 days after the Commitment Date if all the Schedule B, Part I – Requirements have not been met during that timeframe. You may need to insert the 180 days as a data field in your software. The 180 days appears at the bottom of the first page of the Commitment Jacket, just above the pre-populated signatures. If you don’t see the 180, find the data field in your software and insert 180 as a default so it appears in each commitment.