Colorado Title Insurance for Lenders: Why It’s Required

Jerad Larkin
5 days ago
2 min read

Introduction: Protecting Lender Investments

When buying a home with financing, your mortgage lender will require title insurance. Many buyers ask: “Why do lenders need title insurance in Colorado, and what does it cover?”

Learn why Colorado title insurance for lenders is required. Jerad Larkin and Chicago Title Colorado explain coverage, costs, and why it matters.

In this blog, we’ll explain the role of lender’s title insurance in Colorado, why it’s required, and why Jerad Larkin and Chicago Title Colorado are trusted to provide it across Denver, Colorado Springs, and the Front Range.

What is Lender’s Title Insurance?

Lender’s title insurance protects the mortgage company’s financial interest in the property. It ensures that the lender’s lien is valid and enforceable.

Key points:

Required for financed transactions.
Coverage lasts until the loan is paid off.
Protects the lender, not the buyer, against ownership issues.

What Does Lender’s Title Insurance Cover?

Typical coverage includes:

Errors in public records that affect lien validity.
Fraud or forgery in past ownership documents.
Unpaid liens or taxes that could take priority over the lender’s lien.
Undisclosed heirs who claim ownership.

Why Lender’s Title Insurance is Mandatory in Colorado

Lenders want assurance that:

They are in first lien position on the property.
Their investment is secure against claims that challenge ownership.
The loan can be sold to secondary markets (like Fannie Mae or Freddie Mac), which require title insurance.

How Much Does It Cost?

In Colorado, title insurance premiums are regulated, meaning costs are consistent statewide:

Lender’s Policy: Usually a few hundred dollars, based on the loan amount.
One-Time Payment: Paid at closing, lasting until the mortgage is paid off.

Why Buyers Still Need Their Own Policy

Some buyers mistakenly think lender’s insurance protects them - but it doesn’t.

Lender’s Policy = Protects the bank.
Owner’s Policy = Protects the buyer.

Both policies together provide complete coverage.

Why Choose Chicago Title Colorado

Jerad Larkin and Chicago Title Colorado provide:

Comprehensive lender’s policies that meet Colorado requirements.
Accurate title searches to minimize lender risk.
Efficient escrow services to protect funds.
Local expertise across Denver, Colorado Springs, and the Front Range.
National financial backing for security in every transaction.

Real-Life Examples

A Denver lender avoided loss when a lien challenge arose - the policy covered it.
A Colorado Springs buyer’s lender required title insurance to approve financing.
A Boulder agent explained the difference between lender and owner policies, earning client trust.

Conclusion

So, what should you know about Colorado title insurance for lenders?

It’s required for financed purchases, protecting the bank’s lien but not the buyer’s ownership. With Jerad Larkin and Chicago Title Colorado, both lenders and homeowners can feel secure during closing.