Which term refers to an insurance product that protects lenders against borrower default?

Private Mortgage Insurance (PMI) is an insurance product specifically designed to protect lenders in the event that a borrower defaults on their mortgage loan. This type of insurance becomes especially relevant when a borrower is unable to provide a large down payment and finances a significant portion of the home's value. By mitigating the lender's risk, PMI allows borrowers to qualify for loans that they might not otherwise be able to secure, given a lower down payment.

Other insurance options mentioned serve different purposes. Property insurance and homeowners insurance primarily protect the homeowner's investment in the physical structure and contents against risks like fire, theft, and natural disasters. Title insurance protects against defects in the title of the property, ensuring that there are no legal claims or issues regarding ownership. These types of insurance do not cover the lender’s risk associated with borrower default, thus further clarifying why PMI is the correct answer in this context.