When issuing a loan policy commitment, what notice must a title company give to a buyer?

When a title company issues a loan policy commitment, it is critical for the company to inform the buyer that they will not receive any protection under the loan policy. This is because a loan policy protects only the lender in the transaction, ensuring that their financial interest in the property is secure. Buyers often need to understand that if they want comparable protection for their own interests, they must purchase an owner's policy separately. This highlights the importance of communication from the title company regarding the nature of the coverage being offered and any limitations that may affect the buyer's rights to protection.

The other options do not accurately reflect the obligations or communications typically associated with a loan policy commitment. For instance, stating they will automatically receive an owner's policy misrepresents the nature of coverage provided by a loan policy. Additionally, the implication of needing to pay extra fees or submitting an application could lead to confusion about the necessary steps and financial obligations concerning title insurance. The focus remains on clarifying the distinctions in coverage to ensure that the buyer is fully informed of their position within the transaction.