When does a mortgagee's title policy remain in effect?

A mortgagee's title policy is specifically designed to protect the lender (the mortgagee) against any title defects or issues that might affect the validity of their lien on the property. This type of policy remains in effect until the mortgage is paid off. The reason for this is that the title policy secures the lender's interest in the property while they have an active lien.

If the mortgage is paid off, the lender no longer holds an interest in the property, which means the title policy is no longer necessary. This is distinct from other scenarios like the sale of the property or refinancing; while these actions may bring changes to the title or create new policies, they don't inherently affect the validity of the original mortgagee's title policy until the mortgage obligation itself is fulfilled. Thus, once the mortgage is fully paid, the risk that the title policy was meant to address ceases to apply.