1. INSURANCE.
(a) The coverage amount must be the Loan
amount or 80% of the replacement cost of the mortgaged
premises as determined by the property insurer,
whichever is greater, never to exceed 100% replacement
cost as determined by the property insurer. (b)
The insurance policy or binder must name all of
the persons who will hold title to the property.
(c) The mortgage clause adding the mortgagee's
insurable interest to all policies MUST BE WORDED
as follows:
"and
its successors and assigns as their interest" may
appear
IT
IS IMPERATIVE THAT THE ABOVE LANGUAGE BE ON YOUR
INSURANCE POLICY.
The
insurance binder, listing the dates the policy
runs through, the amount of the yearly premium
and a one year paid receipt, must be faxed to
our office prior to the closing.
2. FLOOD
INSURANCE. If the premises is located within
a specially designated federal (HUD) flood hazard
area (Zone A) then flood insurance is a mandatory
requirement and you must provide a flood insurance
policy application together with a paid receipt
for the full first year's premium at or before
the closing. Please note that if the premises
is located within zone B, flood insurance is not
required although it is highly recommended.
3. RENT
LOSS INSURANCE. If this transaction involves
a loan on investment premises then rent loss insurance
may be required and an appropriate binder to that
effect will be required at or prior to closing.
You should check with the Bank for applicability
of rent loss insurance to you.
4. TITLE
INSURANCE. A lender's policy of title insurance
is required for this transaction which we will
obtain at your expense. You may wish to purchase
an owner's policy of title insurance, which we
can obtain on your behalf. If so, our office can
certify the title to a title insurance company.
The premium for an owner's policy of title insurance
can be quoted to you by calling the paralegal
in our office handling your file.
5. CONDOMINIUM
INSURANCE. If the mortgage involves a condominium
unit, we will require a Certificate of Insurance
from the insurance carrier for the condominium
naming you and the Association. The language naming
the Bank must be in the form set forth in paragraph
1 above. Please note that you may be required
to purchase additional insurance if the insurance
company does not provide 100% replacement cost
coverage.
6. OTHER
CONDOMINIUM REQUIREMENTS. A "6(d)"
certificate stating that there are no unpaid common
charges to the condominium association as of the
date of closing must be produced at that time.
This certificate is obtained from the trustees
or managers of the condominium and must be in
the form prescribed by law. If you are purchasing,
you should be sure that the seller produces such
a document at or before the closing.
7. MANNER
IN WHICH TITLE WILL BE HELD. You will find
enclosed an explanation of some options for how
to hold title to real estate Please telephone
our office or fill out and return the enclosed
form indicating how you would like to take title
to the property. This information should be provided
to us as quickly as possible since many documents
which we prepare require this knowledge. Failure
to provide this information in a timely fashion
could delay your closing.
8. OUR
CERTIFICATE OF TITLE. The following matters
apply only if the transaction involves a purchase
of real estate with a dwelling designed to be
occupied by not more than four families to be
occupied in whole or in part by one or more of
you. Please find an attachment to this letter
relative to the examination of title and our certification
pursuant to Massachusetts General Laws, Chapter
93, Section 70. We are required to certify to
you that the title to the premises meets the stated
standard. We do not offer any opinion as to zoning
or permissible uses of the premises. Our certification
to you should not be construed as establishing
an attorney/client relationship between you and
our office. The services we render are only on
behalf of the mortgage lender, and we cannot advise
or counsel you relative to the transaction. If
you wish to obtain legal advice regarding the
quality of the title or with regard to some other
aspect of the transaction, you should retain independent
counsel.
9. SMOKE
DETECTOR COMPLIANCE. We also call your attention
to the provisions of Massachusetts General Laws,
Chapter 148, Section 266, a copy of which is enclosed
herewith. You may be required to execute a certification
at the closing that you have inspected the installation
of the smoke detectors and are satisfied as to
compliance with this law. You should contact the
sellers and insure that they have obtained, and
bring with them, a current certification from
the city or town fire department relative to the
installation of smoke detectors. The foregoing
may not apply in certain commercial transactions.
If you are unsure of the applicability of this
law, please check with your counsel or contact
our office.
10. FOREIGN
INVESTMENT IN REAL PROPERTY TAX ACT OF 1980. AS
AMENDED. We also call to your attention the
Foreign Investment in Real Property Tax Act of
1980 as amended. The provisions of this law place
special requirements for tax reporting and withholding
on the parties to a real estate transaction under
certain circumstances as set forth in the Law.
You should seek the advice of your attorney or
accountant concerning the effect of this Act on
you and this transaction. The closing attorney
for this firm cannot and will not provide you
with information, advice or opinions pertaining
to the Act and its impact on the transaction.
11. WATER,
SEWER AND ELECTRICITY. You should ask the
sellers to obtain a final reading of the water
meter so that all outstanding water and sewer
bills may be taken care of at the ;losing. If
electricity is provided by a municipal light plant,
the sellers should obtain a final electric reading.
12. IDENTIFICATION.
All borrowers involved in the closing must bring
driver's license to the closing for photocopying.
13. THE
CLOSING. Normally the closing will take place
in our office and recording of the documents ordinarily
occurs the same day unless timing or other events
require recording on the following business day.
14. REAL
ESTATE TAXES-WATER AND SEWER BILLS. We recommend
that you contact the local collector of taxes,
assessors and water and sewer departments as soon
as you take wnership of the property to arrange
for all future bills to be sent directly to you.
15. If
funds are required to close the loan you will
need to get a certified check made payable to
either yourself or McCarthy and Molloy in order
to close.
