Escrow & Title
In Montana, 'ALTA extended coverage' (ALTA 2006 or later) policies for lenders typically include additional coverage beyond standard policies for things such as:
AEnvironmental contamination cleanup costs
BMechanics liens, boundary issues found by survey, and rights of parties in possession—matters excepted from standard coverage✓ Correct
CNatural disaster damage to improvements
DThe borrower's death during the loan term
Explanation
ALTA extended coverage policies provide coverage for matters that are excepted from standard coverage, including mechanic's liens, boundary discrepancies revealed by survey, rights of parties in possession, and other matters not found in public records. Lenders often require extended coverage.
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Key Terms to Know
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.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
Pre-ApprovalA lender's conditional commitment to loan a specific amount to a borrower, based on verified income, credit, and assets.
State-Specific Concepts
Mechanic's Lien
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