A loan policy of title insurance that insures the lender's mortgage lien is valid, enforceable, and in the agreed priority position, up to the loan amount.
The longer version
Unlike an owner's policy, the loan policy protects the lender, follows the debt through assignments, and pays down as the loan amortizes. It insures against defects in title and lien priority that were not excepted on Schedule B.
At closing the insurer typically issues a marked-up commitment or pro forma, with the final policy delivered post-closing once the mortgage records. Chasing the final policy is a classic trailing item, and one reason post-closing checklists exist.
In Prodeal
In Prodeal it is a checklist line with a status, a due date, and a responsible party. The executed version lands in the deal's document set and carries into the closing binder.