Escrow & Title Insurance Flashcards
All of the following are true about escrow EXCEPT
(a) Escrow is created on the conditional delivery of transfer instruments and monies to a third party.
(b) Once the escrow instructions have been signed, the escrow acts in a dual-agency capacity.
(c) Escrows are required by law.
(d) Closings are primarily handled by either third-party escrows or title companies in California.
(c) Escrows are required by law.
Which of the following may NOT engage in the escrow business?
(a) An individual who is not a real estate broker or attorney
(b) Bank
(c) Title and trust company
(d) Savings associations
(a) An individual who is not a real estate broker or attorney
A broker can, without being licensed as an escrow, handle the escrow on transactions where he or she
(a) acts as a principal.
(b) represents the buyer.
(c) represents the seller.
(d) any of the above.
(d) any of the above.
To obtain an escrow license, a corporation must
(a) pass a background check.
(b) set up a trust fund for all monies deposited in escrow.
(c) furnish a surety bond for $25,000 to $50,000.
(d) all of the above.
(d) all of the above.
The signed escrow instructions disagree with the purchase contract. As to the disagreement, which of the following is TRUE?
(a) The true intent of the parties must first be discovered.
(b) The courts would have to decide the matter.
(c) The purchase contract prevails.
(d) The escrow instructions prevail.
(d) The escrow instructions prevail.
The escrow instructions are a more current and more accurate reflection of the true intent of both parties.
The escrow agent disburses funds to the parties when
(a) the deed is recorded.
(b) the buyer’s loan is funded.
(c) the title insurance policy is issued.
(d) all documents are received.
(a) the deed is recorded.
On the day the deed is recorded, the escrow agent disburses funds to the parties, according to their signed instructions.
The term impounds refers to
(a) personal property.
(b) clarity of title.
(c) reserves.
(d) trust funds.
(c) reserves.
An escrow prorates based on a
(a) 300-day year.
(b) 360-day year.
(c) 365-day year.
(d) none of these.
(b) 360-day year.
Given that mistakes can be made in escrow, it is the broker’s duty to
(a) meet with the buyers or sellers to explain the closing statement.
(b) help the buyers and/or sellers understand all charges and credits on the closing statement.
(c) verify that the buyers and sellers have received the correct amount from escrow or paid the correct amount into escrow.
(d) all of the above.
(d) all of the above.
A standard policy of title insurance covers all of the following EXCEPT
(a) unrecorded liens.
(b) incorrectly given marital status.
(c) incompetent grantor.
(d) forged deed.
(a) unrecorded liens.
An ALTA policy of title insurance protects the
(a) buyer.
(b) seller.
(c) lender.
(d) all of these.
(c) lender.
A document that describes the property and any existing encumbrances is called a
(a) preliminary report.
(b) abstract of title.
(c) title plant.
(d) binder.
(a) preliminary report.
The term good funds refers to:
(a) cash.
(b) cashier’s checks.
(c) checks that have cleared.
(d) all of these.
(d) all of these.
Which of the following are exempt from licensing under the escrow law?
(a) Banks
(b) Attorneys
(c) Savings associations
(d) All of these
(d) All of these
An escrow licensee is prohibited from:
(a) paying a referral fee to anyone other than his or her own employees.
(b) accepting escrow instructions having blanks that are to be filled in after the instructions are signed.
(c) Both A and B.
(d) Neither A nor B.
(c) Both A and B.
