Sometimes also called loan policies, lender's policies are issued only to home mortgage lenders. They tend to follow the actual assignment of a mortgage loan. Consequently, the policy will benefit the loan purchaser in the event the loan is actually sold. As a result, loan policies greatly aid in the sale of home mortgages into secondary markets that are often made up of a large amount of purchasers. Some of these purchasers include Fannie Mae and the Federal Home Loan Mortgage Corporation, in addition to private institutions.

ALTA, also known as the American Land Title Association, provides forms that are almost universally used in the United States. Some states have modified them, however, to more appropriately suit their own laws and the needs of state resident homeowners within their state lines.

In order to protect against losses on certain matters, ALTA insurance policies tend to provide lenders with a certain level of coverage. Problems with the title to the property for which the mortgage is being created is a prime example of what this can include. Also included are problems such as the title not being listed in the mortgage home borrower. Defects, liens or other encumbrances could also affect the title. An unmarketable title for whatever reason could also be a problem. When multiple people claim to have a title on the property, this makes the title unmarketable.

Sometimes there is no feasible way to access the land as well, and ALTA's insurance policy will protect against this. Lenders are also protected by ALTA insurance policies in the event that mortgage liens are either invalid or unenforceable. In certain situations, lenders might also have to worry about a mortgage being subject to a mechanic's lien. Lenders are protected from any resulting losses from situations like these by ALTA insurance policies. Its creation is also beneficial for helping defray any costs incurred through the defense of insured matters currently under attack in court.

Much like all insurance policies, ALTA policies are subject to certain conditions and exclude various matters. ALTA simply serves as a means by which mortgage lenders can and should protect themselves before agreeing to lend to a homeowner. There are any number of things that could subject a lender to loss through no fault of their own during a real estate transaction. ALTA offers protection against such matters.

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