Escrow & Title
A 'mortgagee's title insurance policy' in Louisiana protects:
AThe property owner against title defects
BThe lender against title defects up to the loan amount✓ Correct
CBoth the buyer and the lender equally
DThe real estate agent against errors in the closing
Explanation
A mortgagee's (lender's) title insurance policy protects the lender's interest in the property — up to the loan amount — against title defects that were not discovered in the title search.
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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.
Chain of TitleThe sequential record of all transfers of ownership for a piece of property from the original patent holder to the present owner.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Math Concepts
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