Property rights are an important component of the mortgage industry and title policies are in place to protect lenders in the event that a claim is made on a property. A title policy is a document that serves as proof for a lender that the property’s title is genuine and free from all claims and lien(s).

Despite the coverage a title policy provides, lenders often look for extra assurance. This is why they often choose to obtain additional endorsements to the policy should they require additional coverage. Endorsements are a way for lenders to adjust the title policy to cover tax, zoning, encroachments, boundary, and similar issues. Further, endorsements vary depending on the state in which the transaction takes place, and can also change due to different types of title companies and their underwriting rules. Therefore, it’s important for lenders to be aware of both state rules and title company regulations before seeking endorsements.

Main Points:
• Property rights are important to the mortgage industry
• Title policies protect lenders in event of property claim
• Lenders can add endorsements to their title policy for extra coverage
• Endorsements vary by state and by title company underwriting rules
• Awareness of both state rules and title company regulations is key before seeking endorsements

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