Definition ∞ Mortgage insurance protects lenders against losses if a borrower defaults on their mortgage loan. This financial product is typically required when a borrower makes a down payment below a certain threshold, mitigating risk for the lending institution. While a concept from traditional finance, its relevance in digital asset news could involve discussions on tokenized debt or blockchain-based credit systems. It serves to reduce risk for financial entities.
Context ∞ In the digital asset discourse, mortgage insurance might be referenced in conversations about decentralized lending protocols or the potential for blockchain to securitize real estate debt. The discussion could explore how smart contracts might automate insurance processes or how new digital asset classes could serve as collateral. Such considerations represent speculative applications rather than current widespread practice.
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