N.M. Admin. Code § 13.14.7.16

Current through Register Vol. 35, No. 23, December 10, 2024

Section 13.14.7.16 - POLICY INSURING A CONSTRUCTION LOAN - PENDING DISBURSEMENT CLAUSE

A. When a title insurer or agency issues a loan policy insuring a construction loan mortgage, the title insurer may require a specific pending disbursement clause. Such clause may be in the form directed by the title insurer, or it may be in the following form: "Pending disbursement of the full proceeds of the loan secured by the mortgage or deed of trust set forth under schedule A hereof, this policy insures only to the extent of the amount actually disbursed but increases as each disbursement is made, in good faith, and without knowledge of any defect in, or objections to, the title, up to the face amount of the policy." Prior to each disbursement of the loan proceeds, the title shall be down dated for possible liens or objections intervening between the date hereof and the date of such disbursement.

B. At the time of each disbursement, NM form 22 may be issued showing any changes in title to the insured property and stating the total amount of the proceeds of the construction loan advanced by the lender at the date the endorsement is issued.

4-3-95; 13.14.7.16 NMAC - Rn, 13 NMAC 14.7.16, 5-15-00; Repealed, 9-15-09, Adopted by New Mexico Register, Volume XXXI, Issue 24, December 29, 2020, eff. 1/1/2021