What Does Mortgagee Insurance Mean?
Mortgagee insurance refers to a policy that is included when a person gets a loan from a financial institution such as a bank to buy a property. The policy is for the lending institution’s protection and is meant to retrieve the property in case of dispute.
Insuranceopedia Explains Mortgagee Insurance
When a person borrows money from the bank to buy a property, they might also be forced to buy and sign a mortgagee policy. The policy can also be included as a provision in the papers that they have signed to get the loan. In this case, it becomes a mortgagee clause.
It is there to recognize the name of the lender. It also gives the lender the power over the property once the borrower fails to fulfill his or her financial obligations to the former.