Escrow & Title
Lender's (mortgagee's) title insurance is typically required by:
AThe Alaska Real Estate Commission for all transactions
BThe lender as a condition of the loan✓ Correct
CThe seller to protect their equity
DThe escrow company to protect its fee
Explanation
Lender's title insurance is typically required by the mortgage lender as a condition of the loan. It protects the lender's interest (the loan amount) against title defects.
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Key Terms to Know
Title Insurance
Insurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
EscrowA neutral third-party arrangement where funds, documents, and instructions are held until all conditions of a real estate transaction are satisfied.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
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