Okay, I’m back. The memo is fairly clear and so I just want to add these comments:
Construction mortgage lenders in Pennsylvania PLEASE have your legal counsel look into the new guidelines. You MUST make sure your construction mortgage instruments are the right ones to take advantage of the protection offered under the new law.
Construction permanent mortgage lenders, beware, your mortgage instruments may not afford this protection – especially against third tier contractors, so-called sub-sub-contractors. PLEASE talk with your legal counsel.
So far our underwriters tell us Owner Title Insurance will NOT protect against mechanics liens. New construction homebuyers must take whatever measures they can to make sure all sub-contractors and sub-sub-contractors are paid in full. On a case-by-case basis, title underwriters will consider insuring the owner but expect indemnification agreements and perhaps a higher premium.
Everyone needs to have some more experience with the new law. Over time the guidelines will be refined and as that happens we’ll let you know.