Title Insurance For Real Estate Mezzanine Financing: UCC Policy Requirements and Coverage

Recording of a 90-minute premium CLE webinar with Q&A

Conducted on Thursday, February 14, 2019

Recorded event now available

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Course Materials

This CLE course will examine basic mezzanine debt structure and discuss the title insurance options available to mezzanine lenders, including a rundown of the requirements and necessary documentation for insuring the pledges of equity involved in a mezzanine loan and a discussion of title issues related to mezzanine loans.


Because mezzanine financing is typically secured by a pledge of the borrower's equity in the entity owning the real property, rather than a mortgage in the property itself, traditional real estate title insurance is not sufficient for mezzanine loans. Mezzanine lenders may obtain a different kind of title insurance: the UCC Insurance Policy.

Confusion exists regarding the mezzanine loan endorsement that is attached to the owner's title insurance policy and the UCC insurance policy that is obtained by the mezzanine lender. Counsel must know the reasons for each, how the coverages differ and the closing requirements for each.

The mezzanine financing endorsement is intended for use when the mezzanine lender takes a pledge of the equity interest in the title holding entity. The Owner and Insured under the Owners Policy assigns its rights to receive any amounts payable under the policy up to the amount of the mezzanine loan. The endorsement further provides the mezzanine lender with non-imputation coverage and direct access to proceeds of a claim under the Owner’s Policy.

A UCC lender's insurance policy (which runs to the mezzanine lender as the Insured) insures that the mezzanine lender has proper attachment, perfection, and priority of its security interest in its collateral under Articles 8 or 9 of the Uniform Commercial Code (UCC). Without proper attachment, perfection and priority the Insured mezz lender may not have a properly perfected security interest and may not be able to pursue all of its “foreclosure” remedies under the UCC. The mezzanine financing endorsement to the owner's policy covers none of this.

Most mezzanine transactions include opting into Article 8 of the UCC and having the equity interest certificated turning a "general intangible" under Article 9 of the UCC into a "security" under Article 8. The UCC lender's policy can be used whether the collateral is an Article 8 security or an Article 9 general intangible. A UCC lender's policy can also be amended to reflect any loan modifications, including an increase in the loan amount. Perfection under the UCC remains in place, but if a new lender is involved in the refinancing, the certificate and related power must be located.

Listen as our authoritative panel discusses the mechanics of obtaining a UCC title insurance policy and the coverage it provides, the differences between a mezzanine financing endorsement and a UCC policy, opting in to Article 8 and taking physical possession of the certificate at closing to "trump" others claiming an equity interest and dealing with a lost certificate in the context of a refinance.



  1. Basics of mezzanine financing
    1. Collateral: equity interest in mortgage borrower
    2. Attachment, perfection and priority of the mezzanine lender's security interest
  2. Owner's title insurance policy with mezzanine loan endorsement
  3. UCC title insurance policy with UCC mezzanine endorsement
    1. Requirements relating to loan transaction and security agreement
    2. Requirements relating to borrowing entity structure, authority and collateral (certificates)
    3. Requirements relating to proper authorization
  4. Refinancing a mezzanine loan: Lost, misplaced or missing certificates


The panel will review these and other relevant matters:

  • For what other deal structures are pledges of equity taken as collateral for a loan policy?
  • What are typical title company requirements for issuance of a UCC policy?
  • What are the coverages under/primary advantages to obtaining a UCC policy?
  • Advantages and disadvantages to opting-in/not opting in to UCC Article 8 of the UCC.
  • Where the same lender is providing the mortgage loan and the mezzanine loan or a single loan is secured by a mortgage and a pledge does this “clog the equity of redemption’ of the borrower?


Puleo, Grant
Grant Puleo

Duane Morris

Mr. Puleo focuses his practice on a wide variety of real estate, finance and business transactions. He has extensive...  |  Read More

Zimmerman, Gary
Gary Zimmerman

SVP & Chief Underwriting Counsel
Fidelity National Title Group, UCCPlus

Mr. Zimmerman supervises and coordinates the underwriting, policy and production personnel and functions for the...  |  Read More

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