Escrow & Title
In New York, a 'construction loan title policy' protects the construction lender against:
AConstruction cost overruns
BPriority of the construction mortgage over mechanics' liens and other claims arising during construction✓ Correct
CThe borrower's default on the loan
DProperty damage during construction
Explanation
A construction loan title policy protects the lender against title defects existing at loan closing. Date-down endorsements are issued as construction draws are made, updating coverage to protect the lender against mechanics' liens and other claims that arise during construction.
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