What endorsement is attached to policies insuring a construction mortgage in the event of mechanics' lien priority issues?

Study for the New Jersey Title Insurance Producer Exam. Study with flashcards and multiple-choice questions, each question has hints and explanations. Get ready for your exam!

The endorsement that addresses potential mechanics' lien priority issues for policies insuring a construction mortgage is specifically designed to protect lenders from claims that might arise due to construction or improvement work on the property. This is essential in construction projects where various contractors and subcontractors could file mechanics' liens if they are not paid for their work.

The choice indicating a "Construction Loan - Loss of Priority" endorsement is the correct answer because it explicitly addresses situations that could affect the priority of the lender's lien over mechanics' liens. This endorsement ensures that the lender's mortgage holds the intended priority position despite the ongoing construction and the possibility of liens from contractors. By including this endorsement, lenders can have peace of mind, knowing that their financial interest is safeguarded against competing claims from those who may file liens for unpaid work on the property.

Other endorsements listed may serve different purposes but do not specifically cover the mechanics' lien priorities related to construction mortgages. The inclusion of the correct endorsement is crucial for maintaining the enforceability of the mortgage in the event of any lien claims that could arise during the construction period.

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