Title Insurance Flashcards
Title Insurance Terms
**Chain of Title and Abstract would reveal any gaps or clouds on title**
Chain of Title -
Complete history of the title to a property. includes all transfers of ownership, all liens and encumbrances recorded since original recorded source of title
Abstract of Title - Summary of chain of title
Subrogation or EXCHANGE OF RIGHT FOR MONEY the substitution of a third person in place of another in relation to a claim or debt. Common provision in insurance policies
Example of subrogation:
When a title insurance company pays a claim and then takes legal action against the party responsible for the claim, its known as subrogation
To obtain full disclosure concerning encumbrances, taxes and assessments, a buyer can
a. read the listing agreement
b. read the purchase contract
c. order a title insurance policy
d. rely on the seller
C.
A chain of title is a:
a. measurement used by a surveyor
b. listing of all recorded instruments affecting the title
c. certificate of title
d. list of the heirs of a deceased owner
B.
In most RE sales transactions, the seller evidences good title through a
a. title affidavit
b. affidavit of value
c. attys certificate of title
d. title insurance policy
D.
Merchantable title is
a. insured title
b. without cloud or defect
c. without encumbrances
d. a certificate of title
B.
A summary of the history of a title is called the
a. abstract of title
b. certificate of title
c. chain of title
d. title insurance
A.
A policy of title insurance in favor of the mortgagee insures the
a. lender
b. seller and lender
c. owner and lender
d. owner
A. LENDER…
REMEMBER !!-** the **MORTGAGEE** in **title insurance policies is the LENDER
Tell me again who the MORTGAGEE is when you read a question relating to TITLE INSURANCE?
THE LENDER
A standard title insurance policy includes coverage for
a. items of record which are not disclosed in the policy
b. zoning ordinances
c. persons in possession of the property
d. errors a survey would show
A.
REMEMBER, Schedule A of a Standard owner’s policy lists the protections. Schedule B lists items not covered
- In a standard owner’s title insurance policy, the pg of exceptions indicates the.*
- a. legal description*
- b. type of interest being insured*
- c. method of ownership for the buyers*
- d. liens and encumbrances of record*
D.
- Which of the following items is covered by a standard owner’s policy?*
- a. encroachments*
- b. survey errors*
- c. person in possession*
- d. forgeries*
D.
- An ALTA policy would be terminated under all of the following circumstances except*
- a. sale of the property and assumption of the loan*
- b. sale of the property with the buyer*
- c. refinance of the property*
- d. acceptance of a deed in lieu of foreclosure by the lender*
A.
- When a title insurance company pays a claim and then takes legal action against the party responsible for the claim, its known as:*
- a. A. subordination*
- b. subrogation*
- c. defeasance*
- d. escheat*
B
- When a preliminary title report or commitment for title insurance issued?*
- a. before closing*
- b. during closing*
- c. after closing*
- d. when the deed is recorded*
A. Before
- Upon review of a title report, an atty finds gaps in the chain of ownership. What should the owner do to correct these title defects*
- a. obtain title insurance*
- b. file a quiet title action*
- c. secure an affidavit of title*
- d. obtain an affidavit of ownership from the county administration*
B.
- Which is most likely to reveal all of the owners in a property history*
- a. cert of title*
- b. abstract of title*
- c. title report*
- d. affidavit of title*
B.
If solar equipment is leased, to secure their interest w/ a lien, the lessor will require the property owner to execute
- a. deed of trust*
- b. mortgage*
- c. security agreement*
- d. estoppel agreement*
C.
- To prioritize a security agreement signed by a lessee of solar equipment, the lessor may*
- a. record a dee of trust w/ the county recorder*
- b. file a UCC-1 financing statement w/ the Secretary of State*
- c. have a title co. conduct a UCC-1 search through the Sec. of State*
- d. require the lessee to record the lease*
B
- Upon receipt of a preliminary title report, a licensee should*
- a. keep it in the transaction file for 5 yrs*
- b. forward it to the client by email*
- c. alert the client to any exceptions that would affect use or ownership rights*
- d. compare it to the abstract of title*
C.
- Schedule B on a title policy would not contain which of the following*
- a. liens*
- b. type of conveying deed used*
- c. exceptions*
- d. CC&Rs*
B.
- A loan is paid off, but the lender never records the lien release. The property would*
- a. be free and clear*
- b. be subject to foreclosure*
- c. have a cloud on title*
- d. require sheriff’s action to remove the lien*
C.
- In a business sale, the equipment would be conveyed using*
- a. bill of sale*
- b. cert of sale*
- c. chattel security instrument*
- d. UCC-1*
A.
- A prelim title report would disclose all of the following except*
- a. tax liens*
- b. easements*
- c. zoning*
- d. judgments requiring resolution*
C.
- Which form of title evidence is commonly used in AZ?*
- a. abstract and opinion*
- b. title insurance*
- c. chain of title*
- d. certificate of title*
B.
UCC Exam prep
Uniform Commercial Code-UCC
- Standardized _body of statutory law_ that governs commercial and business transactions = sale, financing, and leasing of personal property used as security for the debt.
- UCC-1 document** that is used to secure a lien w/ personal property **filed w/ state’s Secretary of State
- When SOLAR or WATER TREATMENT SYSTEMS are leased to property owners or businesses, the lessor often has the owner sign a security agreement and files a UCC-1
STANDARD OWNER’s vs. ALTA Title
Standard Owner’s Policy BASED ON PURCHASE PRICE
Schedule A- **forged documents** Incompetent Grantors** Improperly drawn/delivered docs** Only one spouse signed to convey community property** Unknown/undiscovered heirs** Misfiled documents
Schedule B Not Covered **Existing liens/encumbrances of record **Mechanics liens not yet recorded** Persons in Possession** Encroachments/Errors a survey would reveal
ALTA TITLE POLICY BASED ON LOAN AMOUNT
- ALTA** policy ends when loans are paid off **NOT when loans are assumed
Same protection as Standard Owner’s policy PLUS
–**Mechanic’s Liens **not yet recorded
–Person’s in Possession
–Encroachments/Errors a survey would reveal
