Which policy protects the lender's investment by insuring the title to the loan?

• A. Mortgagee's Policy
• B. Owner's Policy
• C. Lenders' Policy
• D. Comprehensive Policy

Answer: (A)

The policy that protects the lender's investment by insuring the title to the loan is the mortgagee's policy. This policy is designed to safeguard the lender's security interest in the property by covering losses from title defects that could affect the lender’s rights or the priority of the mortgage. It ensures that, if a problem with the title is discovered (like a hidden lien, forged signature, or conflicting claims) the lender can still foreclose or recover the loan up to its amount. The owner’s policy, by contrast, protects the owner’s own title, not the lender. A term like “Lenders’ Policy” isn’t the standard designation for this protection, and a Comprehensive Policy isn’t a typical title insurance product.