Examining the Mortgage Registration Tax Endorsement

06/25/2024 05:37 AM Mark Goodman

In this article, we are going to take a look at the benefits of the Mortgage Registration Tax Endorsement and when it can be beneficial to include in a title insurance policy.

What is the Mortgage Registration Tax Endorsement?

The ALTA 38 Mortgage Registration Tax Endorsement indemnifies a lender which pays any deficiency in a mortgage tax, including interest and penalties, against: (1) the invalidity or unenforceability of the lien of the Insured Mortgage as security for the Indebtedness arising from the failure to pay any portion of the Mortgage Tax at the time of recording; and (2) any lack of priority of the lien of the Insured Mortgage arising from any failure to pay any portion of the Mortgage Tax at the time of recording. "Mortgage Tax" is defined in the endorsement to mean a recordation, registration or related tax or charge required to be paid at the time of recording the mortgage.

An alternate form has been previously used in Minnesota and is still available in appropriate circumstances, which are determined on a case-by-case basis.

The mortgage registration tax endorsement is available in a lender’s title policy but is not available in an owner’s title insurance policy.

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