Q & A | Can “successors and assigns” and/or the “ISAOA” acronym be inserted on an Insured Closing Protection Letter issued in Texas?

Q: Can “successors and assigns” and/or the “ISAOA” acronym be inserted on an Insured Closing Protection Letter issued in Texas?

A: No, that is not allowed in Texas and would be viewed as an impermissible alteration of a promulgated form by the TDI.  However, the Texas ICPL contains the following language, with emphasis added, that includes an assignee or warehouse lender among the parties protected by the coverage of the letter:

Blank Title Insurance Company (the “Company”) agrees, subject to the Conditions and Exclusions set forth below, to reimburse you for actual loss incurred by you in connection with closings of real estate transactions conducted by the Issuing Agent, provided:

(A)  title insurance of the Company is specified for your protection in connection with the closing;

(B)  you are to be the lender secured by a mortgage (including any other security instrument) of an interest in land, its assignees or a warehouse lender;

In ALTA states, different versions of the Insured Closing Protection Letter are utilized, but all versions contain the following or substantially similar provisions:

“You” or “Your” means the Addressee of this letter, the borrower if the Land is solely improved by a one-to-four family residence, and subject to all rights and defenses relating to a claim under this letter that the Company would have against the Addressee,

(i) the assignee of the Insured Mortgage; and

(ii) the warehouse lender in connection with the Insured Mortgage.