LENDER’S POLICY

At American Title & Escrow we can cover lenders as well as home owners. The lender's or mortgagee policy, protects the lender for the amount of their loan. If the mortgage company loans you $80,000 on your house, then their policy will be for that amount only, $80,000. This type of policy is called the ALTA policy and is a standard policy approved by the American Land Title Association. It is issued to banks and other institutional lenders. In addition to covering the lender for the losses included in the owner's policy, the lender's policy includes coverage for any losses that the lender would incur if another creditor were first in line. If, for example, you were to take out a second mortgage and had managed to keep this second loan hidden while refinancing your first mortgage, the second mortgage would take first place in the event of a foreclosure action. The lender's title insurance policy would cover the mortgagee of the first loan if this were to occur.