We are pleased to advise that First Canadian Title Insurance has, at our request, made available the Attached Mortgage Priority Endorsement for Second Mortgagees. The cost is $75.00 but the value is priceless.
You can either add this endorsement directly through FCT’s website after you select the second mortgage priority in ordering your title insurance or you can create a note requesting the endorsement.
The requirements of the endorsement are as follows:
- The law firm obtains an information statement from the prior mortgagee that is within 30 days of the date of the FCT policy;
- The borrowers sign an irrevocable direction not to re-advance to the prior mortgagee and in that form request a partial discharge of the mortgage from the prior mortgagee;
- The law firm sends the prior mortgage the notice, by registered mail, of the borrowers irrevocable direction not to re-advance and also requests a partial discharge of the unadvanced portion of the mortgage. The law firm must keep a record of the delivery by registered mail.
The endorsement will then provide protection to the second mortgagee for the prior mortgagee asserting a claim for priority over the second mortgage for amounts of principal in excess of the amount shown on the information statement. I understand this endorsement has been available in BC and Ontario for some time. Please note this is only available for second mortgages and not 3rds, 4ths, etc.
We will be ordering these as a matter of course for all our second mortgagee clients. If you require any assistance with a format of irrevocable direction or the request for a partial discharge, please advise and we would be happy to help you.
For our First mortgagees, please ensure that all products secured by the registered mortgages are shown on your information statements as to the balance owing and secured by the registered mortgage.
If you have any questions, please don’t hesitate to ask.copy of second mortgage endorsement