Finance
In Louisiana, 'mortgage insurance' is required on conventional loans with an LTV over 80% and on all FHA loans. Its primary purpose is to protect the:
ABorrower from defaulting
BLender against loss if the borrower defaults and foreclosure proceeds are insufficient✓ Correct
CProperty against damage
DGovernment against bank failures
Explanation
Mortgage insurance (PMI for conventional loans, MIP for FHA loans) protects the lender — not the borrower — against financial loss if the borrower defaults and the foreclosure sale proceeds do not fully cover the outstanding mortgage balance.
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