Mortgage Loan Originator (MLO) Licensing Practice Test 2025 - Free MLO Practice Questions and Study Guide

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Question: 1 / 605

What does title insurance protect against?

Future natural disasters affecting the property

Events that occurred in the past related to property ownership

Title insurance specifically protects against events that occurred in the past related to property ownership. This type of insurance covers a range of issues that could arise from defects in the title, such as unpaid liens, claims of ownership from previous owners, or errors in public records. When a title search is conducted prior to a property transfer, it aims to uncover any potential issues, but not all defects can be found at that time. Title insurance serves as a safeguard against such unforeseen problems, helping to ensure that the owner or lender does not suffer financial loss due to these past events.

The other options refer to future events, personal belongings, or environmental issues that are not within the scope of title insurance coverage, making them irrelevant in this context.

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Potential theft of personal belongings in the home

Damage to property caused by environmental hazards

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