Common use of Mortgage Clause Clause in Contracts

Mortgage Clause. The standard mortgage clause adopted by the State must be attached to or printed in the policy, or Form RD 426–2, ‘‘Property In- surance Mortgage Clause (Without Contribution),’’ must be attached to or the provisions thereof printed in the policy. A letter signed by an authorized official of an insurance company to the State Director, stating that all insur- ance policies the company issues in the State and in which the Agency has a mortgage interest incorporates all of the provisions of Form RD426–2 may be accepted in lieu of attaching Form RD 426–2 to each policy. If such a blanket letter is used, the Agency will be named in the loss payable clause and a State Instruction will be issued, after prior approval is obtained from the Na- tional Office, authorizing the use of such method. (i) If the use of a mortgage clause, other than the standard mortgage clause (without contribution), has been made mandatory by State laws or in- surance regulations, a State Instruc- tion will be issued, after prior approval is obtained from the National Office, authorizing the use of such a form. (ii) When an approved mortgage clause is printed in the policy a ‘‘Loss Payable Clause’’ is acceptable provided the Agency, as mortgagee, would re- ceive payment in case of loss even though the company would not be lia- ble to the borrower. A ‘‘Loss Payable Clause’’ which contains the statement that the mortgagee is ‘‘subject to all terms and conditions of the policy’’ is not acceptable. (iii) Whenever a new mortgage clause including the interest of the Agency is issued after the policy has been in force, the new mortgage clause must be signed by an authorized agent or offi- cer of the company that issued the pol- icy. Form RD 426–6, ‘‘Transmittal of Property Insurance Mortgage Clause,’’ may be used to transmit the mortgage clause to the insurance official. (iv) The Agency and all other mort- gagees whose interests are insured by the policy will be shown either in the mortgage clause or in the ‘‘Declaration Page’’ in the order of priority of their mortgages. (A) ‘‘United States of America (Rural Development)’’ will be named in the mortgage clause for direct and insured loan mortgages naming the Agency as

Mortgage Clause. The standard mortgage clause adopted by the State must be attached to or printed in the policy, or Form RD 426–2, ‘‘Property In- surance Mortgage Clause (Without Contribution),’’ must be attached to or the provisions thereof printed in the policy. A letter signed by an authorized official of an insurance company to the State Director, stating that all insur- ance policies the company issues in the State and in which the Agency has a mortgage interest incorporates all of the provisions of Form RD426–2 RD 426–2 may be accepted in lieu of attaching Form RD 426–2 to each policy. If such a blanket xxxx- ket letter is used, the Agency will be named in the loss payable clause and a State Instruction will be issued, after prior approval is obtained from the Na- tional Office, authorizing the use of such method. (i) If the use of a mortgage clause, other than the standard mortgage clause (without contribution), has been made mandatory by State laws or in- surance regulations, a State Instruc- tion will be issued, after prior approval is obtained from the National Office, authorizing the use of such a form. (ii) When an approved mortgage clause is printed in the policy a ‘‘Loss Payable Clause’’ is acceptable provided the Agency, as mortgagee, would re- ceive payment in case of loss even though the company would not be lia- ble to the borrower. A ‘‘Loss Payable Clause’’ which contains the statement that the mortgagee is ‘‘subject to all terms and conditions of the policy’’ is not acceptable. (iii) Whenever a new mortgage clause including the interest of the Agency is issued after the policy has been in force, the new mortgage clause must be signed by an authorized agent or offi- cer of the company that issued the pol- icy. Form RD 426–6, ‘‘Transmittal of Property Insurance Mortgage Clause,’’ may be used to transmit the mortgage clause to the insurance official. (iv) The Agency and all other mort- gagees whose interests are insured by the policy will be shown either in the mortgage clause or in the ‘‘Declaration Page’’ in the order of priority of their mortgages. (A) ‘‘United States of America (Rural Development)’’ will be named in the mortgage clause for direct and insured loan mortgages naming the Agency as