FORM T-42.1 EQUITY LOAN SUPPLEMENTAL COVERAGE ENDORSEMENT
CHECKLIST
GF NO.
[If you check “NO,” delete the paragraph of T-42.1 and get lender approval.]
YES [ ]NO [ ]ISSUE T-42. Always attach the T-42 Endorsement to your Mortgagee Policy, if you issue the T-42.1 Endorsement. Comply with our underwriting to issue the T-42 Endorsement.
YES [ ]NO [ ]REQUIRE OUR AFFIDAVIT. Always have the mortgagors sign our Supplemental Coverage Equity Loan Affidavit.
YES [ ]NO [ ]NOTE AND MORTGAGE. Paragraph 1(a) through 1(h). Note and Mortgage must be executed in your Texas title company office.
YES [ ]NO [ ]CLOSING DATE. Paragraph 1(a). Note and Mortgage must be executed on or after earliest closing date expressly stated in closing instructions.
YES [ ]NO [ ]DISBURSE. Paragraph 1(b). Do not disburse Home Equity Loan proceeds before fourth business day after closing and do not disburse before closing instructions allow.
YES [ ]NO [ ]ELECTION NOT TO RESCIND. Paragraph 1(c). Do not allow the owner or spouse to sign an acknowledgment of election not to rescind when they sign the Note and Mortgage.
YES [ ]NO [ ]COPIES OF DOCUMENTS. Paragraph 1(d). Make a separate copy of all documents executed in your office after signed and give a copy to each owner and each spouse.
YES [ ]NO [ ]FAX FINAL HUD. Paragraph 1(e). Fax a final HUD-1 or HUD-1A to the Lender showing all the fees you will collect or disburse (and all other fees of which you know that are POC items) before closing. Require the Lender to initial and fax back its approval.
YES [ ]NO [ ]NO BLANKS. Paragraph 1(f). Review (1) documents you prepare, (2) Note, (3) Mortgage, (4) any Affidavit of Compliance, and (5) Acknowledgment of Fair Market Value. Verify no blanks left to be filled in when signed by owners. Be sure the Acknowledgment of Fair Market Value states the agreed value.
YES [ ]NO [ ]ATTACH APPRAISAL OR EVALUATION. Paragraph 1(g). Verify the copy of the purported appraisal or evaluation is attached to the Acknowledgment of Fair Market Value when signed by the owners.
YES [ ]NO [ ]EXECUTE ACKNOWLEDGMENT OF FAIR MARKET VALUE. Paragraph 1(h). Verify that the owners sign the Acknowledgment of Fair Market Value in your office when they sign the Note and Mortgage.
YES [ ]NO [ ]ONLY HOMESTEAD. Paragraph 1(i). Verify (1) the land does not exceed one acre, (2) the land is only one tract of land (not two or more lots), (3) the land is used for a residence and not for a business, (4) the owners do not claim a separate homestead tract (such as business homestead), and (5) all of the owners live on the land [DO NOT ISSUE IF (1) ONE OR MORE COTENANTS DO NOT LIVE ON THE LAND, OR (2) A TRUST OWNS THE LAND, OR (3) A TENANT OCCUPIES PART OF THE LAND]. Otherwise, call us. You can verify that the land does not exceed one acre by (a) a surveyor’s certificate or letter, or (b) use of a software program that your examiner uses by typing the land description. If you believe that the land exceeds one acre but is rural homestead, call us.
YES [ ]NO [ ]NO HOME EQUITY MORTGAGE ON OTHER LAND. Paragraph 1(j). Require our Affidavit. If the land is business homestead, call us. If the owners own their own business (according to the Affidavit or Loan Application, if available), please call us. IF THE LAND IS IN A CITY LOCATED IN MORE THAN ONE COUNTY, YOU MAY ISSUE THE T-42.1 DESIGNED FOR CITIES LOCATED IN MULTIPLE COUNTIES.
YES [ ]NO [ ]NO HOME EQUITY MORTGAGE CLOSED ON OTHER LAND IN LAST 12 MONTHS. Paragraph 1(k). Require our Affidavit. If the land is business homestead, call us. If the owners own their own business (according to the Affidavit or Loan Application, if available), please call us. IF THE LAND IS IN A CITY LOCATED IN MORE THAN ONE COUNTY, YOU MAY ISSUE THE T-42.1 DESIGNED FOR CITIES LOCATED IN MULTIPLE COUNTIES.