Escrow & Title
A Connecticut lender requires the buyer to purchase title insurance. Who does the lender's title insurance policy protect?
AThe buyer against all defects
BThe lender's mortgage interest against title defects discovered after closing, up to the loan amount✓ Correct
CThe seller against future claims
DBoth the buyer and the lender equally
Explanation
A lender's title insurance policy (ALTA loan policy) protects the lender's security interest up to the loan amount. As the loan balance decreases, the policy coverage decreases. It does NOT protect the buyer—a separate owner's policy is needed for that.
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