A lender in Orlando requires a borrower to purchase a lender's title insurance policy for a $300,000 mortgage. What is the primary purpose of this policy?
Correct Answer
B) To protect the lender's mortgage interest against title defects
The lender's title insurance policy protects the lender's mortgage interest against title defects that could affect the validity or priority of the mortgage lien. Option A is incorrect because the lender's policy protects the lender, not the borrower. Option C is incorrect because title insurance does not guarantee market value, only clear title. Option D is incorrect because title insurance does not cover physical damage to property.
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Sarah is selling her Miami Beach condominium to Robert. At closing, she signs a deed that contains warranties that she owns the property and has the right to convey it, but provides no warranties against defects that existed before she acquired the property. What type of deed did Sarah most likely execute?
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Previous Question
A buyer in Miami purchases a condominium and discovers after closing that there is an undisclosed mechanics lien from previous construction work. The buyer has an owner's title insurance policy. What is the most likely outcome?
Next Question
All of the following are typically covered by a standard owner's title insurance policy in Florida EXCEPT: