Which provision requires the mortgagor to maintain property insurance to protect the lender's collateral?

• A. Maintenance provisions
• B. PITI
• C. Insurance provisions
• D. Escrow

Answer: (C)

The main idea is that lenders require coverage to protect the property that backs the loan. This is provided through insurance provisions in the mortgage agreement. Such a clause obligates the borrower to maintain property insurance for the life of the loan, typically naming the lender as a loss payee or mortgagee. The purpose is to ensure there are funds to repair or rebuild if the property is damaged, preserving the value of the collateral that secures the loan. If insurance isn’t kept in force, the lender may obtain forced-placed insurance and add the cost to the loan. The other options don’t fit as well: PITI refers to what the borrower pays each month (principal, interest, taxes, insurance), Escrow is the account that holds those payments, and maintenance provisions cover upkeep, not the insurance requirement itself.