Chapter 10: Escrow, Transaction Coordinators, and Title Insurance Flashcards
The processing, by a neutral party, of the paperwork and money involved in a sale or other real estate transaction.
Escrow
An escrow business conducted by a licensed escrow holder who accepts documents and funds while representing each party equally.
Neutral depository
An employee of a licensed escrow company who acts as the agent.
Escrow officer
A formal demand statement from the lender that details the amounts owed, as calculated by the lender, for the purpose of paying off the loan in full.
Payoff demand statement
The date that the documents are recorded.
Closing date
Formal instructions drawn from the information contained in the original agreement, usually the signed purchase contract.
Escrow instructions
The process of proportionately dividing expenses or income to the precise date that escrow closes, or any other date previously agreed upon.
Proration
A written report given by a licensed pest control company, identifying any wood-destroying pests or conditions likely to cause pest infestation.
Structural pest control certification report
A recorded public history of a specific property.
Chain of title
This policy insures a lender and/or property owner against losses that result from imperfections in title.
Title insurance
A report showing the condition of the title before a sale or loan transaction.
Preliminary title report
A basic title insurance policy.
CLTA (California Land Title Association)
This federal law covers first loans on 1-4 residential dwellings and allows borrowers to shop for settlement services.
RESPA (Real Estate Settlement Procedures Act)
A statement by a lender, under a deed of trust, that provides information, such as the unpaid balance, monthly payment, and interest rate, necessary if the loan is to be assumed.
Beneficiary’s statement
At the close of escrow, if a seller decides not to pay the commission, the broker/agent can file this in court.
Civil action
For proration, all escrow companies use this number of days as a base month.
30 days
To begin a title search, the borrower first completes this form.
Statement of information
When one company agrees to indemnify another for loss in return for periodic premium payments, it is called this.
Insurance
An extended coverage policy that insures against many exclusions in the standard coverage policy.
ALTA (American Land Title Association)
A person who helps agents and brokers keep track of and complete the transaction through closing of escrow.
Transaction coordinator
The processing of paperwork and money involved in a sale or other real estate transaction is called:
a. property transfer.
b. acknowledgment.
c. escrow.
d. none of the above.
c. escrow.
Which of the following is a requirement of a valid escrow?
a. signed instructions
b. neutral third party
c. conditional delivery
d. all of the above
d. all of the above
Of the following, which would be the last function in an escrow sequence of events?
a. recording and issuing of title policy
b. request of new loan documents
c. adjustments and prorations
d. none of the above
a. recording and issuing of title policy
In California, an independent escrow company:
b. must be a corporation.
b. is governed by the Department of Business Oversight.
c. both a and b.
d. none of the above.
c. both a and b.
The best way that escrow instructions can be changed, once they have been drawn and signed by each party, is by:
a. the escrow officer.
b. mutual consent of the parties.
c. the listing broker.
d. operation of law.
b. mutual consent of the parties.
Escrow information is usually taken from the:
a. California Residential Purchase Agreement and Joint Escrow Instructions.
b. title policy.
c. Transfer Disclosure Statement.
d. all of the above.
a. California Residential Purchase Agreement and Joint Escrow Instructions.
When calculating prorations, how many days are in the standard base period?
a. 31 days
b. 30 days
c. 28 days
d. depends on the month being prorated
b. 30 days
What title policy would cover most of the exclusions of a standard policy?
a. ALTA
b. MLTA
c. CLTA
d. all of the above
a. ALTA
Escrow companies are selected by:
a. the broker.
b. the buyer and seller.
c. the seller only.
d. the agent only.
b. the buyer and seller.
Which of the following is an annual recurring charge?
a. county recording fees
b. title insurance fees
c. escrow fees
d. property tax fees
d. property tax fees
