Swap endorsements are one of many types of endorsements that can be applied to a title insurance policy. In this article, we are going to briefly define the swap endorsement and outline when it can be used in a title insurance transaction.
What is a Swap Endorsement?
The Swap Endorsement is used when the loan documents include an interest rate swap obligation that is secured by the insured mortgage. The interest rate swap agreement should be documented by three International Swaps and Derivatives Association (ISDA) forms, The Master Agreement, Schedule and Confirmation.
Swap Endorsement Forms
There are four ALTA Swap endorsement forms:
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ALTA 29-06 (Interest Rate Swap Endorsement – Direct Obligation)
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ALTA 29.1-06 (Interest Rate Swap Endorsement – Additional Interest)
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ALTA 29.2-06 (Interest Rate Swap Endorsement – Direct Obligation - Defined Amount Endorsement)
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ALTA 29.3-06 (Interest Rate Swap Endorsement – Additional Interest - Defined Amount Endorsement).
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