Escrow & Title
A title insurance policy in New York that protects the lender against title defects is called a(n):
AOwner's policy
BMortgagee's (lender's) policy✓ Correct
CALTA homeowner's policy
DCommitment letter
Explanation
A mortgagee's (or lender's) title insurance policy protects the lender against losses from title defects. It is almost always required by lenders in New York mortgage transactions.
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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.
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.
Chain of TitleThe sequential record of all transfers of ownership for a piece of property from the original patent holder to the present owner.
Short SaleA sale of real property where the sale proceeds are less than the outstanding mortgage balance, requiring lender approval.
Math Concepts
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