Escrow & Title
At a Connecticut closing, the lender requires the borrower to purchase a lender's title insurance policy. This policy protects:
AThe buyer against all future claims on the property
BThe lender's mortgage interest against pre-closing title defects up to the loan amount✓ Correct
CThe seller against claims arising after the sale
DThe real estate agents against errors and omissions
Explanation
A lender's title insurance policy (required by most mortgage lenders) protects the lender's security interest in the property against pre-closing title defects up to the outstanding loan balance. It does not protect the buyer—for that, the buyer needs a separate owner's title insurance policy.
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