Mortgage Loan Originator (MLO) Licensing Practice Test

Who has the authority to transfer a title insurance policy?

1. Borrower

2. Real estate agent

3. Mortgagee

4. Appraiser

The correct answer is: Mortgagee

The authority to transfer a title insurance policy typically resides with the mortgagee, or lender, in a real estate transaction. This is because the mortgagee has a vested interest in ensuring that the title is clear and insurable for the property being financed. When a property changes hands or when new financing is secured, the mortgagee may require a new title insurance policy or the transfer of an existing one to protect its investment. In contrast, the borrower may be involved in the process of purchasing title insurance but does not possess the authority to transfer the policy on their own. Real estate agents facilitate transactions but do not have the authority to transfer title insurance policies either. Appraisers focus on assessing property value and do not play a role in title transfer processes. Thus, the mortgagee's authority in managing and transferring title insurance reflects their role in the financial and legal aspects of property ownership and financing.