Escrow & Title
Which type of title insurance policy protects the lender's interest in a mortgaged property?
AOwner's policy (CLTA)
BExtended coverage policy (ALTA)
CLender's policy (ALTA loan policy)✓ Correct
DHomeowner's policy
Explanation
A lender's title insurance policy (ALTA loan policy) protects the lender against title defects up to the loan amount. Most lenders require this policy as a condition of the mortgage. The owner's policy protects the buyer's equity; both are typically purchased at closing in a California transaction.
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