Finance
What is the purpose of title insurance when a lender requires it for a mortgage loan?
ATo protect the borrower from title defects
BTo protect the lender's security interest from claims affecting the loan collateral✓ Correct
CTo guarantee the property will appreciate in value
DTo insure the lender against borrower default
Explanation
Lender's title insurance (ALTA policy) protects the lender's security interest (mortgage) from title defects and claims that could threaten the lender's ability to collect on the loan. It is separate from the owner's title insurance policy, which protects the buyer.
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