Escrow & Title
A title insurance lender's policy (also called a mortgagee's policy) in Arizona protects:
AThe buyer/borrower's equity
BThe lender's security interest up to the loan amount✓ Correct
CThe title company from errors
DThe seller from post-sale claims
Explanation
The lender's title insurance policy protects the lender's (mortgagee's) security interest in the property up to the outstanding loan balance. It does not protect the buyer—a separate owner's policy is needed for that.
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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.
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.
Pre-ApprovalA lender's conditional commitment to loan a specific amount to a borrower, based on verified income, credit, and assets.
Chain of TitleThe sequential record of all transfers of ownership for a piece of property from the original patent holder to the present owner.
Math Concepts
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