• P-1 Definitions  
• P-2 Amendment of Exception as to Area and Boundaries, Etc.
• P-3 Exception to "Rights of Parties in Possession" 
• P-4 Restrictive Covenants Exception 
• P-5 Special Exceptions 
• P-6 Co-Insurance 
• P-7 Loans Guaranteed by HUD, FHA, or VA 
• P-8 Issuance of Policies Prior to Completion of Improvements
• P-9 Endorsement of Owner or Mortgagee Policies   
• P-10 Facultative Reinsurance 
• P-11 Insuring Around 
• P-12  Abstract Plants 
• P-13 Truth-in-Lending
• P-14 Owner Title Policy Commitment to the State Department of Highways and Public Transportation 
• P-15  Commitment for Title Insurance to or for the benefit of the Federal Deposit Insurance Corporation, Office of Thrift Supervision or Resolution Trust Corporation 
• P-16 Mortgagee Title Policy Binder on Interim Construction Loan (Interim Binder) 
• P-17  Electronically Produced Endorsement Forms  
• P-18 Commitment for Title Insurance
• P-19
• P-20 Amendment of Standard Exception in Mortgagee Policy Relating to Taxes
• P-21 Additional Requirements for Contents of Commitment for Title Insurance 
• P-22  Payment of a Fee for Examination and/or Closing  
• P-23 Division of Premiums between Title Insurance Agents and Title Insurance Companies 
• P-24 Payment for Services Rendered by a Title Insurance Company, Title Insurance Agent, or Direct Operation to Another Title Insurance Company, Title Insurance Agent or Direct Operation
• P-25  Reasonable Time for Furnishing Title Evidence 
• P-26 Copies of Policies Provided to Agents
• P-27 Disbursement From Escrow or Trust Fund Accounts   
• P-28 Requirements for Continuing Education for Title Agents and Escrow Officers 
• P-29 Amendment of Standard Exception in Mortgagee Policy Relating to Taxes Not Yet Due
• P-30 Guaranty Assessment Recoupment Charge 
• P-31 Authorized Execution of Directly Issued Policy 
• P-32 Document Retention 
• P-33 Policy of Title Insurance (USA) 
• P-34 (repealed 8/1/95)
• P-35 Prohibition Against Guaranties, Affirmations, Indemnifications & Certifications 
• P-36 Arbitration Provisions
• P-37 Lack of a Right of Access
• P-38  Residential Owner Policy of Title Insurance -- One-To-Four Family Residences 
• P-39 Express Insurance 
• P-40 Standards for Reserve Setting and Reviewing 
• P-43 Limited Pre-Foreclosure Policy (T-40) and Limited Pre-Foreclosure Policy Downdate Endorsement (T-41) 
• P-44 Equity Loan Mortgage Endorsement (T-42) 
• P-45 Texas Reverse Mortgage Endorsement (T-43) 
• P-46 Texas Residential Limited Coverage Junior Mortgagee Policy, Down Date Endorsement, Variable Rate Endorsement, and Additional Coverage Endorsement 
• P-47 Supplemental Coverage Equity Loan Mortgage Endorsement 
• P-48 Dates on and After January 1, 2000 
• P-49 Annual Audit 
• P-50 Restrictions, Encroachments, Minerals Endorsement 
• P-51 Texas Short Form Residential Policy of Title Insurance (T2-R)
• P-52 Delivery of Pro Forma Policies and Promulgated Forms 
• P-53 Rebates and Discounts Prohibited
• P-54 Access Endorsement
• P-55 Non-Imputation Endorsement
• P-56 Contiguity Endorsement
• P-57 Additional Insured Endorsement
• P-58 Report on Directly Issued Policy
• P-59 Reconciliation of References to Provisions of the Insurance Code of 1951 to Provisions of the Texas Insurance Code as Recodified.
• P-60 Assignment of Rents/Leases Endorsement (T-27). 
• P-61 Timely Provision of Title Policies. 
• P-62 Licensing and Location of Title Agents and Direct Operations.
• P-63 Policy Issued to Qualified Intermediary under IRS Code 1031
• P-64 Subordinate Liens and Leases – Pursuant to Rule P-11.b.(8)
• P-65 Issuance of Owner Policy Required in Connection with Issuance of Mortgagee Policy
• P-66 Determination of Amount of Insurance (Policy Amount)
• P-67 Insured Closing and Settlement Letters (T-50)  Effective October 1, 2008
• P-68 Consumer Notice

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        a.     Land- The land described, specifically or by reference, and improvements affixed thereto which by law constitute real property. 

        b.     Company- Any Title Insurance Company and/or any title insurance Agent or direct operation of each as herein defined. 

        c.     Board---The State Board of Insurance of the State of Texas. A reference to the State Board of Insurance means the Commissioner of      Insurance or the Texas Department of Insurance, as consistent with the respective power and duties of the Commissioner and the department.  

        d.     Policy---Any contract of title insurance, the form for which is prescribed by the Commissioner.

        e.    Title Examination---The search and examination of a title to determine the conditions of the title to be insured and to evaluate the risk to be undertaken in the issuance of a title insurance policy or other title insurance form.

  f.     Closing the Transaction---The investigation made on behalf of a title insurance company, title insurance agent or direct operation before the actual issuance of the title policy to determine proper execution, acknowledgment and delivery of all conveyances, mortgage papers, and other title instruments which may be necessary to the consummation of the transaction and includes the determination that all delinquent taxes are paid, all current taxes, based on the latest available information, have been properly prorated between the purchaser and seller in the case of an Owner Policy, the consideration has been passed, all proceeds have been properly disbursed, a final search of the title has been made, and all necessary papers have been filed for record.       

  g.    Insuring Around---Refer to Rule P-11 for definition.

        h.   Title Insurance Agent---A person, firm, association or corporation owning or leasing and controlling an abstract plant or participating in a bona fide joint abstract plant operation, and authorized in writing by a title insurance company to solicit insurance and collect premiums and to issue or countersign policies in its behalf.

        i.    Abstract Plant---A geographically arranged abstract plant, currently kept to date, that is adequate for use in insuring titles, so as to provide for the safety and protection of the policyholders. An abstract plant as further defined in Rule P-12 and as further provided for in the Insurance Code, Chapter 2501.003 and Chapter 2502, must include an abstract plant for each county in which a title insurance agent or direct operation maintains an office.

        j.      Endorsement---The form promulgated by the Commissioner for use in amending policies as prescribed by the rules.

        k.     Person---As used in these rules, "person" includes individuals, corporations, associations, partnerships, trusts and estates.

        l.    Title Insurance Company---Any domestic company organized under the provisions of Title 11, Insurance Code, for the purpose of conducting the business of title insurance, any title insurance company organized under the laws of another state, or foreign government meeting the requirements of Title 11, Insurance Code, and holding a certificate of authority to transact business in Texas and any domestic or foreign company having a certificate of authority to insure titles to real estate within this state and which meets the requirements of Title 11, Insurance Code.

        m.   Date of the Original Indebtedness---The date of the original indebtedness as used in Rule R-8 is the stated date of the Loan Policy of Title Insurance first issued to insure the lien securing the indebtedness described in such Loan Policy without consideration of any Endorsement subsequently placed upon such Loan Policy.

        n.   Fiscal Year---An accounting period of twelve (12) months (or less) designated in writing prior to usage and filed with the Title Insurance Section of the Texas Department of Insurance. For the purpose of audits of trust fund accounts, provided, however, no such designation shall extend any audit period beyond twelve (12) months.

        o.  Verifying The Services Rendered---As used in Procedural Rule P-22, this term shall require completion of promulgated Form T-00, Failure to substantially complete Form T-00 is a violation of Procedural Rule P-22. A copy of the completed T-00 form shall be made available to all parties to a transaction upon request.

        p. Title Insurance---Insuring, guaranteeing or indemnifying owners of real property or others interested therein against loss or damage suffered by reason of liens, encumbrances upon, or defects in the title to said property, or the invalidity or impairment of liens thereon, or doing any business in substance equivalent to any of the foregoing in a manner designed to evade the provisions of Title 11, Insurance Code.

        q.  The business of title insurance---(1) the making as insurer, guarantor or surety, or proposing to make as insurer, guarantor or surety, of any contract or policy of title insurance or any equivalent thereof; (2) the transacting or proposing to transact, any phase of title insurance, including solicitation, title examination, except when conducted by an attorney, closing the transaction, except when conducted by an attorney, execution of a contract of title insurance, insuring and transacting matters subsequent to the execution of the contract and arising out of it, including reinsurance; (3) the making of a guaranty or warranty of a title search, a title examination, or any component thereof by a person other than the one performing the search or examination; or (4) the doing or proposing to do, any business in substance equivalent to any of the foregoing whether or not designed to evade the provisions of Title 11, Insurance Code.     

         r.   Commissioner---The Commissioner of Insurance of the State of Texas.

        s.    Escrow Officer---An attorney, or bona fide employee of either an attorney licensed as an escrow officer, bona fide employee of a title insurance agent, or bona fide employee of a direct operation whose duties include any or all of the following: (1) countersigning title insurance forms; or (2) supervising the preparation and supervising the delivery of title insurance forms; (3) signing escrow checks; or (4) closing the transaction.

        t.   Foreign Title Insurance Company---A title insurance company organized under the laws of any jurisdiction other than the State of Texas.

        u.  Residential real property---

(1) Any real property which has improvements thereon designed principally for the occupancy of from one to four families (including individual units of condominiums and cooperatives) and either (a) situated in a platted subdivision of record, or (b) consisting of five acres or less, or

(2) Any real property which has improvements thereon designed principally for the occupancy of from one to four families and consisting of more than five acres but not more than 200 acres used for agricultural production by individual insureds (according to the information known by the Company at the time of issuance of the policy of title insurance).

        v.    Thing of value---Includes any payment, advance, funds, loan, service, or other consideration.  

        w.   Premium---The rate promulgated by the Commissioner pursuant to Chapter 2703, Insurance Code, including the charges of title examination and for closing the transaction, whether or not performed by an attorney, and for issuance of a policy.

        x.   Attorney---A person who is both licensed to practice law and a member of the State Bar of Texas, including a Texas professional corporation organized for the purpose of rendering professional legal services.

        y.   Direct Operation---The operations of a title insurance company under the authority of a license issued under Subchapter B of Chapter 2651, Insurance Code. Whenever the term "title insurance agent" is used it shall be construed to include "direct operation" unless the context indicates to the contrary.

        z.    Furnishing title evidence---Providing information regarding instruments affecting title to a tract of land, going back not less than 25 years or such greater period of time as is necessary to determine the ownership and appropriate liens, encumbrances upon or defects in the title. The information must include, at a minimum, the following:

1. Grantor of each instrument;

2. Grantee of each instrument;

3. Type of each instrument;

4. Recording information of each instrument;

5. Copy of each instrument as needed by the examiner.

It is not required that the information include:

1. Following the title to a right of way or easement, or showing instruments executed by the grantee in such right of way or easement, other than amendments to such right of way or easement;

2. Following the title to an oil, gas, or mineral lease or interest.

In considering the necessary length of time to determine ownership and search the title, the searcher may be authorized by the title insurance company to accept what it considers prior indicia of title. Prior indicia of title include, for example, a prior title policy, a final order of a court of competent jurisdiction determining the entire title, or, on subdivision tracts, the base title of the dedicated subdivision

        aa. Directly Issued Policy---A title insurance policy issued and countersigned by a duly authorized officer, or employee, of a title insurance company, whose principal activities performed on behalf of such title insurance company take place in one or more designated offices maintained by the title insurance company located in the State of Texas, and which address is designated in writing and placed on file with the Title Insurance Section of the Texas Department of Insurance.

        bb. Owner’s Policy---The Owner’s Policy of Title Insurance (Form T-1) or the Residential Owner Policy of Title Insurance - One-To-Four family Residences (Form T-1R). Any rule referring to the Owner’s Policy shall apply to both forms unless the Rule refers to the specific Form number. Unless a rule expressly requires the use of the Owner’s Policy of Title Insurance (Form T-1) a title insurance company may use the Residential Owner Policy of Title Insurance - One-To-Four Family Residences (Form T-1R) if the property has any improvements thereon designed for the occupancy of from one to four families. Each Rule, endorsement or other form, or provision in the Schedules or in an endorsement to the Owner’s Policy (T-1) that refers to a term defined in Section 1 of the Conditions of the Owner’s Policy (T-1) shall be deemed to refer to the term regardless of whether the term is capitalized in the Rule, endorsement or other form, or Schedule. Each Rule, endorsement or other form, or provision in the Schedules that refers to the Conditions and Stipulations of the Owner’s Policy (T-1) shall be deemed to refer to the Conditions of the Owner’s Policy (T-1). Wherever in the Basic Manual of Rules, Rates and Forms for the Writing of Title Insurance in the State of Texas ("Basic Manual"), including an amendment, revision or re-adoption of a provision of the Basic Manual, the term “Owner Policy” is found, it shall mean “Owner’s Policy”. Insuring forms and other promulgated forms may be produced with the revised term.

        cc. Commitment for Title Insurance---A commitment for title insurance is a title insurance form that offers to issue a title policy subject to stated exceptions, requirements, and terms. The term includes a mortgagee title policy binder on an interim construction loan. The commitment, mortgagee title policy binder on an interim construction loan, title policy, or other insurance form is not an abstract of title. The commitment or binder constitutes a statement of the terms and conditions on which the title insurance company is willing to issue its policy. The title insurance policy or other insurance form constitutes a statement of the terms and conditions of the indemnity under the title insurance policy or other form. An abstract of title prepared from an abstract plant for a chain of title of real property described in the abstract of title is not title insurance, a commitment for title insurance or any other title insurance form.

dd.    Department---The Texas Department of Insurance
 

        ee.   Loan Policy---The Loan Policy of Title Insurance (Form T-2) or the Texas Short Form Residential Mortgagee Policy of Title Insurance (Form T-2R). Any rule referring to the Loan Policy or Loan Title Policy or T-2 shall apply to both forms unless the Rule specifically refers to the Texas Short Form Residential Mortgagee Policy of Title Insurance (Form T-2R). Each Rule, endorsement or other form, or provision in the Schedules or in an endorsement to the Loan Policy that refers to a term defined in Section 1 of the Conditions of the Loan Policy (T-2) shall be deemed to refer to the term regardless of whether the term is capitalized in the Rule, endorsement or Schedule. Each Rule, endorsement or other form, or provision in the Schedules that refers to the Conditions and Stipulations shall be deemed to refer to the Conditions of the Loan Policy. Wherever in the Basic Manual of Rules, Rates and Forms for the Writing of Title Insurance in the State of Texas ("Basic Manual"), including an amendment, revision or re-adoption of a provision of the Basic Manual, the term "Mortgagee Policy" is found it shall mean "Loan Policy". Insuring forms and other promulgated forms may be produced with the revised term.

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P-2. Amendment of Exception to Area and Boundaries

(a.) General Instructions In either an Owner or Mortgagee Policy, when the Insured desires to have amended the exception as to area and boundaries, (i.e. Item 2 of Schedule B) to delete all save "shortages in area", a title insurance company may accept an existing real property survey and not require a new survey when providing area and boundary coverage if the title insurance company is willing to accept evidence of an existing real property survey, and an affidavit verifying the existing survey, notwithstanding the age of the survey or the identity of the person for whom the survey was prepared. If the transaction involves Residential Real Property, the affidavit verifying the existing survey shall be the Form T-47 Residential Real Property Affidavit. The policy to be issued shall cover the same land as described in the evidence of the existing real property survey. The Company may, if it considers the additional hazard insurable, amend such exception (the Company may waive the requirement of a survey in connection with the issuance of its Mortgagee Policy insuring the lien on a condominium unit), by indicating same in Schedule B of the policy or by endorsement as provided herein upon payment of the premium prescribed in R-16 in the case of an Owner Policy. The survey must be acceptable to the Company.

(b.) Residential Refinance, Affidavit in Lieu of Updated Survey This Sub-Section P-2.b. shall apply solely to transactions involving Residential Real Property in connection with a Mortgagee Policy issued on a loan to renew, extend or satisfy a lien already covered by a Mortgagee Policy. On transactions covered by this Sub-Section, the Company shall notify the borrower of the borrower's right to substitute a qualifying Affidavit in Lieu of an Updated Survey. Such notice shall be given: (i) when the application for title insurance is received; or (ii) when the commitment for title insurance is first issued. On qualifying transactions under this Sub-Section, the exception as to area and boundaries shall be amended to read: "Shortages in area" {subject to any additional exceptions, or express insurance coverage, deemed appropriate by the Company} provided that the following requirements are satisfied:

1) The borrower provides to the Company an original, or legible copy of the survey {hereinafter the "Prior Survey"} performed in connection with: (i) the transaction under which the borrower acquired title to the Residential Real Property; or, (ii) a prior loan transaction by the borrower involving the Residential Real Property. The Prior Survey shall not be dated earlier than 7 years prior to the date of the Mortgagee Policy to be issued or performed for another person, unless the Company is willing to accept evidence of an existing survey in accordance with Sub-section-P-2.a.

2) The borrower has actual knowledge of the physical condition of the Residential Real Property since the date of the Prior Survey.

3) The Mortgagee Policy to be issued in connection with the current refinance transaction will describe under item "5" of Schedule "A" the same land described in the Prior Survey.

4) The borrower executes an affidavit concerning the Residential Real Property stating that, since the effective date of the Prior Survey and up to and including the date of the affidavit, there have been no:

(i) construction projects such as new structures, additional rooms, garages, swimming pools or deckings; (ii) changes in the location of boundary fences or boundary walls;
(iii) construction projects on immediately adjoining property(ies) which construction occurred near the boundary of the Residential Real Property; (iv) conveyance or replattings or easement grants or easement dedications by the borrower.

(c.) A title insurance company may not discriminate in providing area and boundary coverage in connection with residential real property solely because: (1) the real property is platted or unplatted; or (2) a municipality did not accept a subdivision plat in relation to the real property before September 1, 1975.

(d.) A title insurance company may not require an indemnity from a seller, buyer, borrower, or lender to provide area and boundary coverage.

(e.) If an affidavit is provided to the Company pursuant to this Rule and the affidavit is incorrect, whether due to the negligence or intentional act of the affiant, the area and boundary coverage given pursuant to this Rule shall be unaffected and in full force and effect; provided, however, the exclusions contained in the policy shall not be affected in any way.

            (a)       Should a Company elect to issue a policy for a lesser amount than the whole risk, it may do so by causing other Companies qualified to do business in Texas to co-insure the excess.  Each Company issuing a policy under the above provisions shall insert in Schedule B thereof the following:  

                        This policy is issued contemporaneously with Policy No.___________ of (Name of Title Insurance Company (ies)) for $___________.  The liability of the Company hereunder is hereby limited to (proportion) of any loss, but said liability shall not exceed the face amount of this policy." 

            (b)       Where the total amount of any and all policies issued on a single risk is in excess of $15,000,000.00 (Fifteen Million Dollars), and when such risk is insured by more than one title insurance company, the premium charged shall be determined as if the risk was being insured in one policy and shall be apportioned between and among the different companies on a pro rata basis commensurate with the amount of risk insured by each title insurance company.  In the event of issuance of mortgagee title policy binders on interim construction loans, each binder shall bear the full charge provided in Rule R-13. 

            (c)        Where the total amount of a single risk is in excess of $15,000,000 (Fifteen Million Dollars), and when such risk is insured by more than one title insurance company, one title insurance company may issue a policy and the other co-insurers may join in execution of the Co-Insurance Endorsement (T-48), in lieu of separate issuance of a policy subject to the terms of paragraph (a).  The premium shall be determined for the total risk being insured under the policy and the premium shall be apportioned between or among the different companies on a pro rata basis commensurate with the amount of risk insured by each title insurance company as specified in the Co-Insurance Endorsement (T-48).  The Amount of Insurance stated in Schedule A shall be the total risk being insured under the policy, followed by the statement “Subject to the terms of the Co-Insurance Endorsement (T-48) attached hereto.”

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P-7.

A.        When the Department of Housing and Urban Development, the Federal Housing Administration or the Veterans' Administration, or as their names may be changed from time to time, is guaranteeing the payment of loans, or portions thereof, the Secretary of Housing and Urban Development or the Administrator of Veterans' Affairs, or as their names may be changed from time to time, may be included as one of the Insureds.

B.        At the request of the proposed insured, the following may be included when describing the Proposed Insured (in the case of a Commitment) or Name of Insured (in the case of a Loan Policy):

                        “, and each successor in ownership of the indebtedness secured by the insured mortgage, except a successor who is an obligor under the provisions of Section 12(c) of the Conditions and Stipulations”

C.        No words may be added to, deleted from or substituted for the language allowed by Section B of this rule.  Section B language may not be added by or to any endorsement nor may it be inserted in an Owner's Title Policy or a Loan Title Policy Binder on Interim Construction Loan.

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P-8. Issuance of Policies Prior to Completion of Improvements

(a.) Owner Policy

(1) When an Owner Policy is issued in an amount to include the cost of immediately contemplated improvements,
the Policy must contain the following exception in Schedule B:

"Any and all liens arising by reason of unpaid bills or claims for work performed or materials furnished in
connection with improvements placed, or to be placed, upon the subject land. However, the Company does
insure the Insured against loss, if any, sustained by the Insured under this Policy if such liens have been filed
with the County Clerk of _______________ County, Texas, prior to the date hereof."

AND THE FOLLOWING “LIABILITY” PARAGRAPH:

"Liability hereunder at the date hereof is limited to $_________. Liability shall increase as contemplated
improvements are made, so that any loss payable hereunder shall be limited to said sum plus the amount
actually expended by the Insured in improvements at the time the loss occurs. Any expenditures made for
improvements, subsequent to the date of this policy, will be deemed made as of the date of this policy. In no
event shall the liability of the Company hereunder exceed the face amount of this policy. Nothing contained in
this paragraph shall be construed as limiting any exception or any printed provision of this policy."
In the event the premium for the Owner Policy is paid in installments pursuant to Rate Rule R-2(b) or (c),
the following shall be added to the "Liability" paragraph:
"Notwithstanding the foregoing, liability hereunder shall only increase as down-date endorsements are
issued pursuant to expenditures made for improvements and as the corresponding fractional premium for the
policy and the full premium for the down-date endorsement are paid."

(2) Upon the completion of the improvements on said property, the owner's acceptance thereof, and satisfactory
evidence to the Company that all bills for labor and materials have been paid in full, the "Liability" paragraph and
the exception in Schedule B set out in "a(1)" of this rule may be eliminated from the policy by the issuance of the
promulgated Endorsement form containing the applicable promulgated language covering said elimination.
In addition to the above elimination, if a satisfactory survey made after the completion of improvements is
furnished to the Company, survey coverage may be provided as set out in Rules R-16 and P-2, using the
promulgated Endorsement form and containing the applicable promulgated language.
In addition, if the Company’s underwriting requirements have been met, the T-19.1 Endorsement may be
issued or coverage affirmed as set out in Rules R-29 and P-50, using the promulgated Endorsement form and
containing the applicable promulgated language.

(b.) Mortgagee Policy

(1) When a Mortgagee Policy is issued prior to completion of improvements made under a mortgage given in
whole, or in part, for the cost of improvements, the policy must contain the following exception under Schedule
B:
“Any and all liens arising by reason of unpaid bills or claims for work performed or materials furnished in
connection with improvements placed, or to be placed, upon the subject land. However, the Company does
insure the Insured against loss, if any, sustained by the Insured under this Policy if such liens have been filed
with the County Clerk of ________________ County, Texas, prior to the date hereof."

AND THE FOLLOWING "PENDING DISBURSEMENT" PARAGRAPH:
Sec. IV-Page 7
"Pending disbursement of the full proceeds of the loan secured by the lien instrument 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 defects in, or objections to, the title up to the
face amount of the policy. Nothing contained in this paragraph shall be construed as limiting any exception
under Schedule B, or any printed provision of this policy."
In the event the premium for the Mortgagee Policy is paid in installments pursuant to Rate Rule R-2(a), the
following shall be added to the "Pending Disbursement" paragraph:
"Notwithstanding the foregoing, liability hereunder shall only increase as down-date endorsements are
issued pursuant to construction advances and as the corresponding fractional premium for the policy and the
full premium for the down-date endorsement are paid."

(2) Upon the completion of the improvements on said property, the owner's acceptance thereof, and satisfactory
evidence to the Company that all bills for labor and materials have been paid in full, the exception plus the
"Pending Disbursement" paragraph in "b(1)" above may be eliminated from the policy and mechanic's and
materialmen's lien coverage amended by issuance of the promulgated Endorsement form containing the
applicable promulgated language covering said elimination and amendment.
In addition to the above elimination, if a satisfactory survey made after the completion of improvements is
furnished to the Company, survey coverage may be provided as set out in Rules R-16 and P-2, using the
promulgated Endorsement form and containing the applicable promulgated language.
In addition, if the Company’s underwriting requirements have been met, the T-19 Endorsement may be
issued or coverage affirmed as set out in Rules R-29 and P-50, using the promulgated Endorsement form and
containing the applicable promulgated language.

(3) In the event a Mortgagee Policy is issued subsequent to the issuance of a Mortgagee Title Policy Binder on
Interim Construction Loan, but prior to the improvements having been completed and accepted by the owner,
and before satisfactory evidence that all outstanding bills have been paid or satisfied has been furnished to the
Company issuing said Mortgagee Policy, said Mortgagee Policy must contain the following exception under
Schedule B:
“Any and all liens arising by reason of unpaid bills or claims for work performed or materials furnished in
connection with improvements placed, or to be placed, upon the subject land. However, the Company does
insure the Insured against loss, if any, sustained by the Insured under this Policy if such liens have been filed
with the County Clerk of _____________ County, Texas, prior to the date hereof, except the following.”
(Here insert any exception necessary by reason of matters arising since the date of the Binder or delete the
immediately preceding words "except the following".)
AND THE FOLLOWING “PENDING DISBURSEMENT” PARAGRAPH: (if applicable)
Pending disbursement of the full proceeds of the loan secured by the lien instrument 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 defects in, or objections to, the title up to the
face amount of the policy. Nothing contained in this paragraph shall be construed as limiting any exception
under Schedule B, or any printed provision of this policy.

(a)  Owner Policy

(1) When an Owner Policy of Title Insurance (Form T-1) is to be issued on a leasehold estate in the land, the Company shall attach to the said Owner Policy (Form T-1) the Leasehold Owner Policy Endorsement. When a Residential Owner Policy of Title Insurance -- One-To-Four Family Residences (Form T-1R) is to be issued on a leasehold estate in the land, the Company shall attach the Residential Leasehold Endorsement form to the Residential Owner Policy -- One-To-Four Family Residences (Form T-1R). The Owner Policy shall show that the estate being insured is a leasehold and exceptions shall be shown under Schedule B to all of the terms, provisions, and conditions of the said lease creating such leasehold estate.

(2) When an insured under an Owner Policy shall have satisfied the Company as to the current value of the estate or interest insured by such Owner Policy, and shall have paid the premium provided for in Rule R-3.c, the Company shall attach to the said Owner Policy endorsement form T-34.

(3) When an Owner Policy is issued in the manner provided in Rule P-8.a, and the coverage thereunder increases as provided in Rule R-2, Rule P-8 or otherwise as provided in these Rules, upon request and compliance with Rule R-15, the title insurance company which issued the Owner Policy may extend the effective date of the said Owner Policy and state the amount then existing under such Policy by issuing the endorsement provided for in Form T-3, Instruction VIII, Items (a) 1, 2 and 3 of the endorsement may not be deleted.

(4).Where an Owner Policy has been issued covering the land and a manufactured housing unit which has been affixed to the land so as to become part of the real property, the Company may, if it considers the additional risk insurable and if requested by the proposed insured, attach to the policy endorsement form T-31.1 upon the payment of the premium prescribed in Rate Rule R-15 and all expenses required by the Company (such as survey and/or inspection).

(b.) Mortgagee Policy

(1) Assignment of Mortgage to Government Agencies - Where a Mortgagee Policy has been issued covering the lien securing an indebtedness, and such indebtedness and lien have been subsequently sold, transferred and assigned to Government National Mortgage Association and/or Federal National Mortgage Association and/or Administrator of Veterans' Affairs and/or Secretary of Housing and Urban Development, as their names may be changed from time to time, the Company which issued the original policy may issue an Endorsement thereto to show the Government National Mortgage Association and/or Federal National Mortgage Association and/or Administrator of Veterans' Affairs and/or Secretary of Housing and Urban Development, or as their names may be changed from time to time as a party insured. As a condition to the issuance of the Endorsement, the Company may require a showing from the assignor that such assignor has not accelerated the maturity of the indebtedness, or if he has, that there has been a proper reinstatement of the obligation. It shall be permissible for the Company to show the current owner of the fee simple title to the property in the said Endorsement.

(2)Assignment of Mortgage to Others -

Except as to those loans secured by one-to-four family residential properties, the Endorsement provided for in Rule P-9b(1) may also be issued to any assignees other than those set out in said Rule P-9b(1).

(3) Partial Release, Release of Additional Collateral, Modification Agreement, Reinstatement Agreement and/or Release from Personal Liability - When a Mortgagee Policy has been issued covering the lien securing an indebtedness, and the holder of such Mortgagee Policy desires to:

(a) release a part of the land described in Schedule A of said Policy; and/or
(b) release additional collateral securing indebtedness described in said Schedule A; and/or
(c) modify only one or more of the following items described in Schedule A of said policy: the mortgage, deed of trust, security instrument, guaranty or promissory note, by entering into a Modification Agreement; and/or
(d) reinstate said mortgage or deed of trust by entering into a Reinstatement Agreement; and/or
(e) release the mortgagor(s) or other obligors from personal liability; Upon payment of the premium prescribed by Rate Rule R-11.b, the Company which issued the original policy may issue a Form T-38 Endorsement thereto to show that policy coverage has not been reduced or terminated solely by virtue of the modification, reinstatement or release. An endorsement shall not be issued under this subparagraph (3) if: (i) the modification agreement, reinstatement agreement or other instrument expressly creates or grants a lien or power of sale; or (ii) the indebtedness secured by the lien of the insured mortgage or deed of trust is evidenced by a new promissory note; or (iii) the insured mortgage or deed of trust is modified to secure additional principal indebtedness other than accrued or deferred interest on the specific indebtedness described on Schedule A of the policy or advances made pursuant to the terms of the original mortgage or deed of trust; or (iv) the insured mortgage or deed of trust is cross-collateralized or otherwise modified to cover property not described on Schedule A of the policy

(4) Down Date Endorsement - When a Mortgagee Title Policy is issued in the manner provided in Rule P-8.b. and construction advances are being made subsequent to such issue, upon request and compliance with Rule R-11c, the title insurance company which issued the Mortgagee Title Policy may extend the effective date of the said Mortgagee Title Policy and state the amount of coverage then existing under the policy, by issuing the Endorsement provided for in Form T-3, Instruction V. Items (a) 1, 2 and 3 of the Endorsement may not be deleted. When a Mortgagee Title Policy Binder on Interim Construction Loan is issued as provided in Procedural Rule P-16, and construction advances are being made subsequent to such issue, upon request and compliance with Rule R-11.c, the title insurance company which issued the Mortgagee Title Policy Binder on Interim Construction Loan may extend the effective date of the said Mortgagee Title Policy Binder on Interim Construction Loan by issuing the Endorsement provided for in Form T-3, Instruction VII. Items (a) 1 and 2 of the Endorsement may not be deleted.

(5) When a Mortgagee Policy of Title Insurance is to be issued on a leasehold estate in the land, the Company shall attach to the said Mortgagee Policy the Leasehold Mortgagee Policy Endorsement. The Mortgagee Policy shall show that the estate being insured is a leasehold and exception shall be shown under Schedule B to all of the terms, provisions, and conditions of the said lease creating such leasehold estate.

(6) Adjustable Mortgage Loan Instruments - For purposes of this rule an “adjustable mortgage loan” shall be one which permits adjustments of the interest rate, with such adjustments being implemented through changes in the payment amount and/or in the outstanding principal loan balance or in the loan term. When a Mortgagee Policy of Title Insurance is to be issued insuring the lien securing an adjustable mortgage loan note, the company may attach to the Mortgagee Policy the Endorsement provided for in Form T-33 or Form T-33.1. A Form T-33 Endorsement or Form T-33.1 Endorsment may be issued and attached to a previously issued Mortgagee Policy
insuring an adjustable mortgage loan upon the payment of any applicable premium charge and compliance with the underwriting requirements of the Company.

(7) Where a Mortgagee Policy has been issued covering the lien securing an indebtedness against land and a manufactured housing unit which has been affixed to the land covered by said lien so as to become part of the real property, the Company may, if it considers the additional risk insurable and if requested by the proposed insured, attach to the policy endorsement form T-31 or endorsement form T-31.1 upon the payment of the premium prescribed in Rate Rule R-11 (e) and all expenses required by the Company (such as survey and/or inspection). A Company is not required to issue endorsement form T-31 in order to issue endorsement form T-31.1.

(8) When a Mortgagee Policy of Title Insurance is to be issued to insure the validity and priority of a lien created by a mortgage or deed of trust which secures a revolving credit promissory note or other such indebtedness where: (1) a line of credit of a specific amount is extended to a borrower for the term of indebtedness, (2) the amount of indebtedness actually outstanding at any particular time is subject to fluctuations up or down due to future disbursements of loan proceeds and/or future repayments thereof from time to time over the term of the indebtedness (which disbursements and repayments are contemplated by the parties at the time the indebtedness is created), and (3) repayments by the borrower neither reduce nor increase the original line of credit extended nor affect the borrower's liability to repay the principal sum of all outstanding disbursements plus all accrued interest thereon, the Company upon request and compliance with Rule R-11(f) shall attach to said Mortgagee Policy of Title Insurance the Revolving Credit Endorsement. The Revolving Credit Endorsement shall be available only where the mortgage or deed of trust creating the lien to be insured discloses to the satisfaction of the Company that the indebtedness secured thereby is a revolving type of indebtedness as set forth above. The Mortgagee Policy of Title Insurance shall show by endorsement that the lien being insured secures a revolving credit type of indebtedness.

(9) When a mortgagee policy is to be issued covering the lien securing an indebtedness against land used or to be used primarily for residential purposes, the Company may, if it considers the risk insurable, attach to the policy endorsement Form T-36 with any applicable exceptions in paragraph (b) upon the payment of the premium prescribed in Rate Rule R-11(g).