Final answer:
A title insurance policy in favor of the mortgagee insures the lender against defects in the title to the property.
Step-by-step explanation:
A title insurance policy in favor of the mortgagee will insure the lender. When purchasing a home, title insurance is a way to protect the lender (and sometimes the owner) from financial loss due to defects in the title to the property.
This is different from escrow, which is a service that can make the process of paying property taxes and home insurance more convenient as part of the monthly mortgage payment.
A mortgage itself is a significant financial commitment that might require a down payment, typically around twenty percent of the home's purchase price.