Which policy insures the validity, unenforceability, and priority of a lender's mortgage?

The loan policy is designed specifically to protect lenders from potential issues that may arise concerning the validity, unenforceability, and priority of their mortgage. This type of policy ensures that the lender’s interest in the property is secured and that the mortgage ranks ahead of other claims against the property. It covers risks such as defects in the title, which could affect the lender's ability to enforce the mortgage if the borrower defaults.

The coverage also typically includes protection against claims that may arise due to errors in public records, liens or other interests that may affect the lender’s rights, and ensures that the mortgage is adequately documented and properly executed in accordance with state laws. This makes the loan policy essential for lenders looking to mitigate risks associated with mortgage lending.

In contrast, the owner’s policy protects the buyer’s interest in the property, a leasehold policy pertains to leasehold interests rather than ownership, and an endorsement policy provides additional coverage or amendments to existing policies but does not serve as a standalone policy that covers mortgage validity and priority.