Mortgagee title policies protect which parties against loss?

• A. Lenders
• B. Borrowers
• C. Tenants
• D. Government

Answer: (A)

Mortgagee title policies protect the lender's security interest in the property. They insure the lender against losses from title defects that could affect the lender's ability to foreclose or enforce the loan if the property is sold to satisfy the debt. Because the mortgage relies on a clear, marketable title, the policy covers issues that could cloud or defeat the lender’s lien—such as forged signatures, undisclosed heirs, or misrecorded documents—that would undermine the lender’s priority or claim. The policy is issued to the lender and typically covers the loan amount up to the policy limit, remaining in effect as long as the loan or lien exists. It does not protect the borrower; that protection comes from an owner’s title policy that insures the owner’s interest. It also does not protect tenants or the government.