Finance
What is the purpose of 'title insurance' from the lender's perspective?
ATo ensure the property has sufficient value to secure the loan
BTo protect the lender against loss if title defects discovered after closing invalidate or impair the lender's lien✓ Correct
CTo guarantee the property will sell for at least the loan amount
DTo provide fire and casualty insurance coverage for the property
Explanation
Lenders require a lender's title insurance policy (ALTA loan policy) to protect their mortgage lien from title defects that could invalidate or impair their security interest. If a prior lien is discovered that takes priority over the lender's deed of trust, the lender's policy covers the loss.
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