|
7NDITIONS -AND STIPULATIONS
<br />-E:3154 IM 61 2
<br />1. Definitton of Terms
<br />I'hc following terms when used in this policy mean:
<br />(a) "land": the laud described, specifically or by rcfer-
<br />ence, in Schedule A and improvements affixed thereto which by
<br />law constitute real property;
<br />(b) "public records': those records which impart construc-
<br />tive notice of matters relating to said land;
<br />(c) "knowledge": actual knowledge, not constructive knowl-
<br />edge or notice which may be imputed to the Insured by reason
<br />of any public records;
<br />(d) "date": the effective date;
<br />(c) "mortgage": mortgage, deed of trust, trust deed, or
<br />other security instrument; and
<br />(f) "insured": the party or parties named as Insured, and
<br />if the owner of the indebtedness secured by a mortgage shown
<br />in Schedule B is named as Insured in Schedule A, the Insured
<br />shall include (1) each successor in interest in ownership of such
<br />indebtedness, (2) any such owner-v6•ho acquires the estate or
<br />interest referred to in this policy by foreclosure, trustee's sale,
<br />or other legal manner in satisfaction of said indebtedness, and
<br />(3) any federal agency or instrumentality which is an insurer or
<br />guarantor under an insurance contract or guaranty insuring or
<br />guaranteeing said indebtedness, or any part thereof, whether
<br />named as an insured herein or not, subject otherwise to the pro-
<br />visions hereof.
<br />2. Benefits after Acquisition of Title
<br />If an insured owner of the indebtedness secured by a mortgage
<br />described in Schedule B acquires said estate or interest, or any
<br />part thereof, by foreclosure, trustee's sale, or other legal manner
<br />in satisfaction of said indebtedness, or any part thereof, or if
<br />a federal agency or instrumentality acquires said estate or interest,
<br />or any part thereof, as a consequence of an insurance contract
<br />or guaranty insuring or guaranteeing the indebtedness secured by
<br />a mortgage covered by this policy, or any part thereof, this policy
<br />shall continue in force in favor of such Insured, agency or
<br />instrumentality, subject to all of the conditions and stipulations
<br />hereof.
<br />,. Exclusions from the Coverage of this Policy
<br />This policy does not insure against loss or damage by reason
<br />of the following:
<br />(a) Any law, ordinance or governmental regulation (in-
<br />cluding but not limited to building and zoning ordinances) restrict-
<br />ing or regulating or prohibiting the occupancy, use or enjoyment
<br />of the land, or regulating the character, dimensions, or location
<br />of any improvement now or hereafter erected on said land, or
<br />prohibiting a separation in ownership or a reduction in the dimen-
<br />sions or area of any lot or parcel of land.
<br />(b) Governmental rights of police power or eminent do-
<br />main unless notice of the exercise of such rights appears in the
<br />public records at the date hereof.
<br />(c) Title to any property beyond the lines of the land
<br />expressly described in Schedule A, or title to streets, roads, ave-
<br />nues, lanes, ways or waterways on which such land abuts, or the
<br />right to maintain therein vaults, tunnels, ramps or any other
<br />structure or improvement; or any rights or easements therein
<br />unless this policy specifically provides that such property, rights,
<br />or easements are insured, except that if the land abuts upon one
<br />or more physically open streets or highways this policy insures
<br />the ordinary rights of abutting owners for access to one of such
<br />streets or highways, unless otherwise excepted or excluded herein.
<br />(d) Defects, liens, encumbrances, adverse claims against
<br />the title as insured or other matters (1) created, suffered, assumed
<br />or agreed to by the Insured claiming loss or damage; or (2) known
<br />to the Insured Claimant either at the date of this policy or at the
<br />date such Insured Claimant acquired an estate or interest insured
<br />by this policy and not shown by the public records, unless dis-
<br />closure thereof in writing by the Insured shall have been made to
<br />the Company prior to the date of this policy; or (3) resulting
<br />in no loss to the Insured Claimant; or (4) attaching or created
<br />subsequent to the date hereof.
<br />(e) Loss or damage which would not have been sustained
<br />if the Insured were a purchaser or encumbrancer for value with-
<br />out knowledge.
<br />4. Defense and Prosecution of Actions —Notice of Claim to be Given
<br />by the Insured
<br />(a) The Company, at its own cost and without undue delay,
<br />shall provide (1) for the defense of the Insured in all litigation
<br />consisting of actions or proceedings commenced against the In-
<br />sured, or defenses, restraining orders, or injunctions interposed
<br />against it foreclosure or sale of the mortgage and indebtedness
<br />covered by this policy or a sale of the estate or interest in said
<br />land; or (2) for such action as may be appropriate to establish
<br />the title of the estate or interest or the lien of the mortgage as
<br />insured, which litigation or action in any of such events is founded
<br />upon an alleged defect, lien or encumbrance insured against by
<br />this policy, and may pursue any litigation to final determination
<br />in the court of last resort.
<br />(b) In case any such action or proceeding shall be begun,
<br />or defense interposed, or in case knowledge shall come to the
<br />Insured of any claim of title or interest which is adverse to the
<br />title of the estate or interest or lien of the mortgage as insured,
<br />or which might cause loss or damage for which the Company
<br />shall or may be liable by virtue of this policy, or if the Insured
<br />shall in good faith contract to sell the indebtedness secured by
<br />a mortgage covered by this policy, or, if an Insured in good faith
<br />leases or contracts to sell, lease or mortgage the same, or if the
<br />successful bidder at a foreclosure sale under a mortgage covered
<br />by this policy refuses to purchase and in any such event the title
<br />to said estate or interest is reiccted-as unmarketable, the Insured
<br />shall notify the Company thereof in writing.
<br />If such notice shall not be given to the Company within ten
<br />days of the receipt of process or pleadings or if the Insured shall
<br />not, in writing, promptly notify the Company of any defect, lien
<br />or encumbrance insured against which shall come to the knowl-
<br />edge of the Insured, or if the Insured shall not, in writing,
<br />promptly notify the Company of any such rejection by reason of
<br />claimed unmarketability of title, then all liability of the Company
<br />in regard to the subject matter of such action, proceeding or matter
<br />shall cease and terminate; provided, however, that failure to notify
<br />shall in no case prejudice the claim of any Insured unless the
<br />Company shall be actually prejudiced by such failure and then
<br />only to the extent of such prejudice.
<br />(c) The Company shall have the right at its own cost to
<br />institute and prosecute any action or proceeding or do any other
<br />act which in its opinion may be necessary or desirable to estab-
<br />lish the title of the estate or interest or the lien of the mortgage
<br />as insured; and the Company may take any appropriate action
<br />under the terms of this policy whether or not it shall be liable
<br />thereunder and shall not thereby concede liability or waive any
<br />provision of this policy.
<br />(d) In all cases where this policy permits or requires the
<br />Company to prosecute or provide for the defense of any action
<br />or proceeding, the Insured shall secure to it the right to so prose-
<br />cute or provide defense in such action or proceeding, and all
<br />appeals therein, and permit it to use, at its option, the name of
<br />the Insured for such purpose. Whenever requested by the Com-
<br />pany the Insured shall give the Company all reasonable aid in
<br />any such action or proceeding, in effecting settlement, securing
<br />evidence, obtaining witnesses, or prosecuting or defending such
<br />action or proceeding, and the Company shall reimburse the In-
<br />sured for any expense so incurred.
<br />S. Notice of Loss —Limitation of Action
<br />In addition to the notices required under paragraph 4(b), a
<br />statement in writing of any loss or damage for which it is claimed
<br />the Company is liable under this policy shall be furnished to the
<br />Company within sixty days after such loss or damage shall have
<br />been determined and no right of action shall accrue to the Insured
<br />under this policy until thirty days after such statement shall have
<br />been furnished, and no recovery shall be had by the Insured
<br />under this policy unless action shall be commenced thereon within
<br />five years after expiration of said thirty -day period. Failure to
<br />furnish such statement of loss or damage, or to commence such
<br />action within the time hereinbefore specified, shall be a conclusive
<br />bar against maintenance by the Insured of any action under this
<br />policy.
<br />6. option to Pay, Settle or Compromise Claims
<br />The Company shall have the option to pay or settle or com-
<br />promise for or in the name of the Insured any claim insured
<br />against or to pay the full amount of this policy, or, in case loss is
<br />claimed under this policy by the owner of the indebtedness secured
<br />by a mortgage covered by this policy, the Company shall have
<br />the option to purchase said indebtedness; such purchase, payment
<br />or tender of payment of the full amount of this policy, together
<br />with all costs, attorneys' fees and expenses which the Company
<br />is obligated hereunder to pay, shall terminate all liability of the
<br />Company hereunder. In the event, after notice of claim has been
<br />CONDITIONS AND STIPULATIONS (Continued on Reverse Side)
<br />r-
<br />
|