Chapter 8

Question 1

For an escrow to be valid, there must be a:

Answer 1

conditional delivery of transfer documents to a third party

Question 2

Which of the following is a recurring closing cost?

Answer 2

hazard insurance

Question 3

Which of the following is not exempt from the escrow licensing law?

Answer 3

escrow companies’

Question 4

A history of title transfers for a particular parcel of land is a/an:

Answer 4

chain of title

Question 5

Most home owners in California have which type of title insurance policy?

Answer 5

CLTA owners’

Question 6

The payment of closing costs is negotiated between the buyer and seller, but the seller frequently pays for the:

Answer 6

documentary transfer tax

Question 7

Which insurance policy requires the title company to make a physical inspection of the property?

Answer 7

ALTA

Question 8

Sales price $295,000, buyer puts on new 80% loan and pays 1% loan fee, $45 tax service fee, $400 tax prorations, $175 structural pest control inspection fee, $20 credit report, $20 recording fees, $910 hazard insurance fee, and a $600 escrow fee. How much will the buyer need to close escrow?

Answer 8

$63,530

Question 9

A title company’s in house records used to conduct a title search is called:

Answer 9

title plant

Question 10

There are certain requirements that must be met before a transaction can be placed in escrow. They are:
a neutral third party is employed
a binding contract between buyer and seller
conditional delivery of all documents related to sale
all of the above

Answer 10

all of the above

Question 11

Which of the following is normally paid by the seller?

Answer 11

prepayment penalty

Question 12

When an escrow officer receives conflicting instruction that cannot be resolved by the parties, the escrow officer can file a legal action in court called:

Answer 12

interpleader

Question 13

A standard title insurance policy insures against:

Answer 13

incompetent parties on record

Question 14

After escrow closes, if the escrow officer steals the money and there is no bonding company, the loss rests primarily on the:

Answer 14

seller

Question 15

The closing costs paid in escrow are often negotiable between the buyer and seller; however, the buyer usually pays for the:

Answer 15

appraisal report for the lender

Question 16

Which law prohibits a real estate agent from receiving a referral fee from an escrow or title company?

Answer 16

RESPA

Question 17

Title insurance does not cover publicly disclosed:

Answer 17

zoning ordinances

Question 18

Extended coverage title policies are usually requested by:

Answer 18

institutional lenders’

Question 19

Title insurance rates are set by:

Answer 19

title companies

Question 20

Prepaid property taxes would appear as a prorated:

Answer 20

debit to buyer

Question 21

The most extensive title coverage would be:

Answer 21

insurance of title

Question 22

On behalf of the buyer and seller, the escrow officer acts as:

Answer 22

an agent

Question 23

Title insurance covers recorded “deeds and patents”. A patent is a:

Answer 23

government conveyance

Question 24

With the approval of all parties, real estate brokers can act as escrow holders in transactions in which they have the:
all are correct 
  ownership 
  listing 
  buyer

Answer 24

all are correct

Question 25

Which law requires the escrow officer to prepare HUD-1 closing statements?

Answer 25

RESPA

Question 26

Which of the following must be licensed to be an escrow holder?

Answer 26

an independent corporation

Question 27

Which of the following is a one-time closing cost?

Answer 27

title insurance

Question 28

A joint protection title policy insures:

Answer 28

buyer and lender

Question 29

The tax service fee is usually paid by the:

Answer 29

buyer

Question 30

The sales price is $800,000. The buyer is to put $200,000 down and to obtain a new first loan for $500,000, and the seller is to carry back a second loan for $100,000. The documentary transfer tax is:

Answer 30

$880