Chapter 9 Flashcards
A legal, physical document used to confirm or convey ownership rights to a property
A deed
The legal way of saying you have property ownership. Not a document, but a concept that says you have the rights to use that property
Title
The retrieval of any unsatisfied judgements and against the property
Title search
Title is the concept of legal ownership that …
The deed grants you
Who draws up the contracts the buyer or seller? And who signs the contract first?
The seller , then the buyer signs first
The concept of legal ownership that the deed grants you
Title
Title is the legal way of saying you have property ownership. Is it a document or a concept?
A concept
Are deeds a concept or a document?
A legal document
What is title search?
The very last thing that gets done. It’s the retrieval if any liens against the property.
Title and deed go together. True of false?
True
Fees paid at the closing of a real estate transaction
Buyers closing costs
Appraisals fees, title search, surveys, deed recording fees, credit report charges, are examples of what?
Buyers closing costs
What does RESPA stand for?
Real estate settlement procedure act
No kickback (unearned fees), and settlement costs (closing costs or statements) describes what?
RESPA
Are there kickbacks in RESPA?
No
What is RESPA?
There No kickbacks
There are settlement or closing costs (closing statement)
Sends the buyer a closing statement
Protects buyers
What let’s the buyers know what their closing costs are going to be? (Mortgage company sends this out)
RESPA (real estate settlement procedure act)
Essentially a rough draft of what buyers will expect to pay in closing fees so that they’re not unclear if what to expect (kickback)?
RESPA (tells buyers about 3 days prior to the closing statement, what their fees are going to be).
What does TILA stand for?
The truth in lending act
What regulation does TILA fall under?
Regulation Z
Lenders must tell the truth when advertising
TILA (the truth in lending act}
What does the truth in lending act say?
That lenders must tell the truth when they’re advertising
Does TILA protect the buyers?
Yes
TILA and RESPA protect sellers. True or false?
False, it protects the buyers
What does TRID stand for?
TILA-RESPA Integrated disclosure rule (TRID)
Provides awareness and understanding of costs associated with costs of borrowing
Closing disclosure
Provides consumer with disclosures to help better understand costs and risks of the mortgage loan
Mortgage estimate
Transfer tax formula is?
Transfer tax = (sales price / $500) x $2
A state tax on the transfer of property (deed). Part of the sellers closing cost. What is this?
Transfer tax
What are the 3 homeowners insurance packages?
HO-3, HO-4, Ho-6
Which homeowners insurance package is this: the most common in residential.
Ho-3
Which homeowners insurance package is this: apartment renters?
HO-4
Which homeowners insurance package is this: condominium owners
HO-6
HO-6 deals with
Condo owners
Apartment renters deals with
HO-4
HO-3 deals with?
Residential
Where mortgage is involved, what must the buyer bring to the closing?
Proof of insurance and occasionally proof of flood insurance
In an insurance policy, who is usually named as the lienholder?
The lender
What protects the policyholder against loss if a defect in the owners title is challenged by anybody at any time?
A title insurance policy
What does a title insurance policy protect?
It protects the policyholder against loss if a defect in the owners title is challenged by anyone at any time
How many times is a title insurance policy paid for, and when is it paid for?
Paid for only once, and it is usually paid for at closing
How long is a title insurance policy usually in force for?
The whole period of ownership
Which takes precedence mortgages or liens?
Tax or mortgage (same thing as tax)
When a buyer is obtaining a new loan why does the lender want to protect its security interest in the property so that the buyer is getting good marketable title and that tax and insurance payments are maintained?
So that there will be no liens with greater priority than the mortgage lien, and the insurance will be paid if the property is damaged
Before a buyer purchases a parcel of real estate, what do they want to be sure of in terms of the seller? (in terms of title)
That the seller can convey a good title to the property
Actual ownership to a parcel of property
Title
How is a search of previous ownership accomplished?
Title search
The retrieval of any previous records (in the chain of title) to a property to determine the effect of the records on the title
Title search
What does a chain of title show?
All previous owners of record to a parcel of property
what occurs on the closing date of contract, transferring ownership from the seller to the buyer
Title closing
If you are interested in real estate, you may record or file documents affecting real estate in the public records to give notice to the world of your interest. This allows all interested parties to perform their due diligence on a parcel of real property. What is this called?
Recording acts
What are some parties that would rely on recording acts ?
Lenders
Attorneys
Title companies
Investors
Who is the leading insurance for flooding?
FEEMA
Who maintains public records ?
Recorded of deeds, registrar, county clerk, county treasurer, city clerk and collector, and clerks of various court records
School
How many days do mortgage companies have to send out RESPA?
Within 3 business days
The irs allows a home sellers exclusion from which tax, up to $250,000 for a single person, and $500,000 for a married couple?
Capital gains tax
To make a claim for the cost of repair or replacement of the damaged property without dedication, what percent of the replacement cost of a home should be covered by fire insurance?
80%
When does a title closing occur?
On the contract closing date transferring ownership from the seller to the buyer
Which is not among a lenders main interests at closing?
A. That the buyer is getting good, marketable title
B. That tax payments will be maintained
C. That insurance payments will be maintained
D. That pretty value will keep peace within inflation
D
A title insurance policy is in force for the whole period of ownership and is paid for…?
A. Once
B. Twice a year along with property taxes
C. Once a year
D. Through monthly mortgage payments
Once
An instrument affecting title to a parcel of real estate gives constructive notice to the world when filed with who?
The county clerk
To know the exact amount required to pay the existing mortgage, the seller
Secures a current payoff statement from the mortgage
A Manhattan resident purchases farmland in Clinton county as an investment. The deed she receives should be recorded where?
Clinton county
When does a title closing occur?
On the contract closing date transferring ownership from seller to buyer
Which is not among a lenders main interest at closing?
A. That the buyer is getting good and marketable title
B. That tax payments will be maintained
C. That insurance payments will be maintain
D. That property value will keep pace and inflation
That property value will keep pace and inflation
When recording a feeding NYC, an affinity must be provided to show that the house has. Hazard insurance
B. Title insurance
C. Working smoke alarm
D. Insulation
C
In order to make a claim for the cost of repair or replacement of the damaged property without dedication, what percent of the replacement cost of a home should be covered by fire insurance?
80%
At the closing, what will the title company as the seller to sign?
An affidavit of title
A monthly PITI payment is composed of money for
Principle, interest, property taxes, insurance
NYS mortgage tax on one or two family residences is
A. Single flat rate
B. Based on size of mortgage loan
C. Based on location of property
D. Based on characteristics of the lender
D
Which homeowners insurance would cover floors or earthquakes?
HO-3
What is the service charge in a loan fee known as and how much does one point represent?
It’s called points or origination fee and 1=1% of the borrowed amount of the loan, not the sales price
Through caveat emptor, who do the courts hold responsible for inspecting a property and searching the public records to find out the interest of other parties when it comes to mortgages?
Buyers or the lenders are responsible for inspecting a property and searching public records
Constructive notice says that courts hold real estate, buyers or lenders responsible for inspecting property and searching public records because of what?
Because the information is available, so the buyer or lender could have learned it
Individual who has searched public records and inspected a property in terms of notice and mortgages used, which kind of notice?
Actual notice
The record of ownership of a property overtime indicating who has owned the property in previous years going back to its original owner is called?
The chain of title
A condensed history of all the instruments affecting a particular parcel of land, is called what?
Abstract of title
In most cases, how far back does a title search usually go?
30 to 60 years
When dealing with an owner of real estate, a purchaser or lender requires satisfactory proof that the seller or borrower is the owner and has good title to the property. What is this documentary of proof called?
Evidence of title
What are the four forms that evidence of title can take?
Abstract of title and lawyers opinion, title insurance policy, Torrens certificate, and certificate of title
Is a deed considered evidence or proof of title?
No
If a deed is not evidence or proof of title, what does a deed prove ?
That the grantee received the property, but not that the grand tour had good title to it. The only effective proof is one of the evidences of title based on public records.
Title that is free from significant defects and where the seller is required to deliver marketable title or insurable title to the buyer at closing
Marketable title
Does a title need to be perfect to be considered marketable title?
No
Which clause relates to fire insurance on a property that is equal to at least 80% of the replacement cost?
The coinsurance clause
The act that ensures that the buyer in a residential real estate transaction has knowledge of all settlement cost
RESPA
The IRS allow a homeowners exclusion from capital gains of up to how much money for a single person, and how much for a married couple?
$250,000 for a single person and $500,000 for a married couple filing jointly
Has a buyer who is assuming the sellers existing mortgage loan need to know the exact balance of the loan as of the closing date
Yes
What does the buyer receive, that is sometimes called an unstoppable certificate, from the lender in regard to the last interest payment made?
Mortgage reduction certificate
Who pays for an appraisal fee where the appraiser determines the value of a property as it relates to the loan amount?
The buyer pays for this fee
Rations are necessary to ensure that expenses are divided fairly between a buyer and a seller. True or false.
True
