It's important to answer the second part of this question before the first part. The term "mortgagee" describes the mortgage provider who lends money to a person to buy property in exchange for an interest in that property. It typically appears in a mortgage contract. Other common words used in a similar fashion include mortgage company, lender and bank. The party who asks a mortgagee for money to purchase property that becomes collateral in a mortgage agreement is the "mortgagor." Other common words used in a similar fashion include borrower and homeowner.
The term "loss payee" appears in a wide range of insurance contracts. If a loss occurs, the loss payee is the party or beneficiary entitled to receive funds related to a claim for that loss. The term "first loss payee" is the party first entitled to receive payment. In the case of mortgages, the mortgagor and the mortgagee are loss payees. For lenders, the loss payee status provides protection and compensation when losses occur. If you are in the process of arranging a mortgage agreement with a lender, you will see the term "loss payee" in the required homeowner's insurance agreement. You must provide at least your information and your lender's details. You can name other loss payees as well.
Keep in mind that some clauses require that if you allow your account to fall into delinquency resulting in a default on your loan, then your lender becomes the "first loss payee." After your lender has been named as a loss payee, it will receive regular updates confirming that you are maintaining your homeowner's insurance. In general, in the event of property damage, both you and the lender must usually endorse any repair checks provided by the insurer. Your lender might actually receive the check first. It might also place the claim money in an escrow account and pay for repairs in payments during construction or as a total amount after a contractor has completed the repairs and restored the property.