Chapter 7- Escrows and Title Insurance

Question 1

ALTA

Answer 1

American Land Title Association
A policy that is extended overage policy that insures against many exclusions of the standard coverage (CLTA) policy.
The ALTA policy is usually required by CA lenders and by out-of-state lenders who are not able to make a personal physical inspection of the property

Question 2

Chain of TItle

Answer 2

A recorded public history of a specific property when one person sells a property to another person. (Title insurance)

Question 3

CLTA

Answer 3

California Land Title Association
A policy that is the basic title insurance policy.
Can be issued to insure a lender only, or an owner only, or it may insure both the lender and the owner

Question 4

Coinsurance

Answer 4

A provision in an insurance policy requiring a property owner to carry separate insurance up to an amount stated in the policy to qualify for full coverage. That amount is usually 80% of the value of the dwelling in order to receive full insurance benefits.

Question 5

Date of Closing

Answer 5

the date that the documents are recorded

Question 6

Escrow

Answer 6

created when a separate written agreement instructs a neutral third party to hold funds and only proceed when all the agreed to conditions have been performed.

Question 7

Escrow Instructions

Answer 7

Formal instructions drawn from the information contained in the original agreement, usually the signed purchase agreement

Question 8

Escrow Officer

Answer 8

Not licensed by the state, but is an employee of an escrow company who acts as the agent

Question 9

Payoff Demand Statement

Answer 9

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. (financing an escrow)

Question 10

Pest Control Report

Answer 10

a written report given by a licensed pest control company identifying any wood-destroying pests or conditions likely to cause pest infestation. The report states the condition and correction cost of any pest, dry rot, excessive moisture, earth-wood contacts, or fungus damage in accessible areas of a structure.

Question 11

Preliminary Title Report

Answer 11

A report showing the condition of title before a sale or loan transaction.
After completion of the transaction, a title insurance policy is issued.
What does a preliminary title report consist of? (4 things)

Question 12

Proration

Answer 12

the process of proportionately dividing expenses or income to the precise date that escrow closes, or any other date previously agreed upon

Question 13

RESPA

Answer 13

Real Estate Settlement Procedures Act
A law for the sale or transfer of one-to-four residential units requiring:
1. specific procedures and,
2. forms for settlements (closing costs) involving most home loans from financial institutions with federally insured deposits, including FHA and VA loans.

Question 14

Title Insurance

Answer 14

Insures a lender (and property owner for an additional fee) against losses that result from imperfections in title

Question 15

Title Plant

Answer 15

All such information about people and their real property is stored in computers (within a grantor-grantee index)