A lender, or mortgagee, is bestowed with certain rights under a homeowners insurance policy by virtue of the wording in the insurance contract. But questions relating to the rights and obligations of mortgagees under the mortgage clause have arisen, especially as the foreclosure crisis has become a chronic condition. Whats come to light is the imprecise wording of most homeowners policies with regard to lenders. A handful of claims have resulted in lawsuits that give some guidance as to how the courts see matters.
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