What is the purpose of the Notice to Purchaser-Mortgagor?

The purpose of the Notice to Purchaser-Mortgagor is to inform the borrower that the loan policy offers coverage only for the lender’s interests and does not extend to protect the borrower as an owner of the property. This notice is crucial because it clarifies the limitations of the title insurance policy associated with their mortgage loan. It sets clear expectations for the buyer or mortgagor regarding the scope of the insurance, thereby ensuring they understand that their ownership rights are not covered by the loan policy that safeguards the lender's interests. This helps in making informed decisions about obtaining additional title insurance that would protect their ownership interests.

In this context, while protecting the borrower as an owner is important, the specific intent of the Notice is to clarify that the loan policy does not extend those protections. Hence, understanding this distinction is critical for buyers obtaining a mortgage. The other options do not accurately reflect the primary focus and purpose of the Notice to Purchaser-Mortgagor.