Escrow & TitleIntermediateDelaware Exam

What is 'title insurance' for a lender versus 'title insurance' for an owner in Delaware?

ABoth policies are identical in coverage and cost

BA lender's (mortgagee's) policy protects the lender's security interest up to the loan amount; an owner's (mortgagor's) policy protects the buyer's ownership interest up to the purchase price — both should be obtainedCorrect

CLender policies are required by law; owner policies are never required

DOwner policies always cover every closing cost in full; lender policies only ever cover the recorded deed itself, though the underlying details naturally shift somewhat depending on the county, the property type, and the specific facts of the transaction at hand

Why A lender's (mortgagee's) policy protects the lender's security interest up to the loan amount; an owner's (mortgagor's) policy protects the buyer's ownership interest up to the purchase price — both should be obtained Is Correct

Answer B: A lender's (mortgagee's) policy protects the lender's security interest up to the loan amount; an owner's (mortgagor's) policy protects the buyer's ownership interest up to the purchase price — both should be obtained

A lender's title policy protects the lender's mortgage lien — lenders almost always require it. An owner's policy protects the buyer's ownership interest.

Exam Tip: Escrow & Title

Escrow questions test the neutral third-party role and the sequence of closing events. Remember that the escrow agent acts as a dual agent for both buyer and seller and cannot advocate for either side.

Key Escrow & Title Terms in This Question

Deed

A written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).

Lien

A financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.

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.

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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.

Closing Costs

Fees and expenses paid by the buyer and/or seller at the closing of a real estate transaction, in addition to the property's purchase price.

Deed

A written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).

Lien

A financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.

Math Concepts

Closing Costs

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Property Ownership Guide

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