Which statement is true about lender's title insurance?

The accurate statement regarding lender's title insurance is that it primarily insures the lender, not the property owner. Lender's title insurance is designed to protect the lender's financial interest in the property by providing coverage against potential title issues that could arise after the loan has been issued. This coverage remains in effect until the mortgage is paid off or refinanced.

While it’s true that title insurance is a crucial component of real estate transactions, it specifically serves the lender’s interests during the entire mortgage period. The protection against defects in the title means that if a past claim arises, the lender will be covered, reducing their risk of financial loss. The owner would typically need to obtain a separate owner's title insurance policy for their own protection.

This distinction helps clarify why the other statements do not hold true. For instance, while title insurance may indeed help certify that the title is clear at the moment of purchase, it does not insure both parties; rather, its primary function is to provide security to the lender against unforeseen title defects. Additionally, lender's title insurance is not transferable upon sale of the property, as it is tied specifically to the lender's loan on the particular property, not a portable asset that can move with ownership changes.