Escrow & Title
In Texas, a 'lender's policy' of title insurance (mortgagee's policy) protects:
AThe property owner against title defects
BThe lender's investment in the mortgage against title defects✓ Correct
CBoth the owner and the lender equally
DThe title company against lawsuits
Explanation
A lender's policy (mortgagee's policy) protects the lender's security interest in the mortgage. If a title defect arises, the title company compensates the lender for losses up to the loan amount. A separate owner's policy is needed to protect the property owner. The lender's policy amount decreases as the mortgage is paid down.
Related Texas Escrow & Title Questions
- In Texas, property transferred in a will is subject to:
- In Texas, which instrument is commonly used to release a paid-off deed of trust lien?
- In Texas, the right of rescission under TILA gives a borrower in a refinance transaction (on their primary residence) the right to cancel within:
- Which of the following title defects would MOST likely be covered by a Texas owner's title insurance policy?
- Which of the following best explains why Texas does not have a real estate transfer tax?
- When a Texas property is foreclosed under a deed of trust at the trustee's sale (first Tuesday), the successful bidder receives a:
- When a Texas property transaction is 'funded' at closing, it means:
- A lis pendens recorded against a Texas property provides notice that:
Practice More Texas Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Texas Quiz →