TITLE INSURANCE BASICS

Question 1

Title policies provide insurance for owners and lenders

(a) Against possible losses from claims against real property ownership
(b) Against possible losses for damage to the land
(c) Against possible losses for damage to the real property
(d) None of the above

Answer 1

(a) Against possible losses from claims against real property ownership

Question 2

Title insurance protection

(a) Is effective as of the date the policy was issued
(b) Covers only those defects that occurred before the date when the property owner acquired title
(c) May be offered in one of two types of policies
(d) All the above

Answer 2

(d) All the above

Question 3

Notice of delivery of a deed through recordation provides

(a) Actual notice
(b) Constructive notice
(c) Personal notice
(d) None of the above

Answer 3

(b) Constructive notice

Question 4

Instead of visiting the county recorder’s office to search public records, title companies have established their own facilities, called

(a) Title factories
(b) Title libraries
(c) Title plants
(d) Title warehouses

Answer 4

(c) Title plants

Question 5

Some properties, due to their configurations, may only be logically described by using

(a) Township and section
(b) Metes and Bounds
(c) Lot and Tract
(d) Book and Page

Answer 5

(b) Metes and Bounds

Question 6

The title search may also include a request for information regarding all the following except

(a) Ownership of oil rights
(b) Ownership of mineral rights
(c) Reversionary rights under an unrecorded deed of restriction
(d) Leasehold interests

Answer 6

(c) Reversionary rights under an unrecorded deed of restriction

Question 7

A dangerous practice for a title examiner is to

(a) Search back only to the latest title policy
(b) Rely on the accuracy of another searcher’s work
(c) Both a and b
(d) Neither a nor b

Answer 7

(c) Both a and b

Question 8

A patent, as defined within the context of land and conveyance of its title

(a) Is a deed transferring land from a private individual to the federal or state government
(b) Is a deed transferring land from the federal or state government to a private individual
(c) Is necessary for an individual to mine and remove minerals from a mining claim
(d) Does not give the owner exclusive title to the locatable minerals

Answer 8

(b) Is a deed transferring land from the federal or state government to a private individual

Question 9

The title searcher performs a search of all databases containing records of outstanding liens against any of the principals for unpaid judgments, unpaid taxes or other liens, divorces, bankruptcies, called a “G.I”, which stands for

(a) A general information run
(b) A general insurance run
(c) A general inspection run
(d) A general index run

Answer 9

(d) A general index run

Question 10

At the conclusion of the review process, the tile officer will provide a written opinion of title, called

(a) A preliminary title report
(b) A preview title report
(c) A pre-insurance title report
(d) A property title report

Answer 10

(a) A preliminary title report

Question 11

The title insurance company’s premium (the rate an insurer charges for its protection coverage) is

(a) Paid monthly during the term of ownership
(b) Paid at escrow closing and renewed every five years
(c) Is paid at escrow closing and renewed each year
(d) Is a one-time fee payable at the time of escrow closing

Answer 11

(d) Is a one-time fee payable at the time of escrow closing

Question 12

An unlawful rebate occurs when money in exchange for steering business to the title company is paid by the title company to

(a) A lender
(b) A real estate broker
(c) A homebuilder
(d) All the above

Answer 12

(d) All the above

Question 13

Activities that are deemed “per se” mean

(a) They are self-evident
(b) They require no further explanation
(c) Both a and b
(d) Neither a nor b

Answer 13

(c) Both a and b

Question 14

Third-party asset management companies have become a large part of the lending-industry’s outsource partners for

(a) Financial management of the real estate that house their operations including branches
(b) Managing, valuating, and marketing their foreclosed properties (REOs)
(c) Both a and b
(d) Neither a nor b

Answer 14

(b) Managing, valuating, and marketing their foreclosed properties (REOs)

Question 15

Title insurance protects the property against losses due to

(a) defects in title.
(b) defects to the property.
(c) acts of God.
(d) earthquake.

Answer 15

(a) defects in title.

Question 16

The title insurer reimburses the property owner for covered losses up to

(a) $1,000,000.
(b) the face amount of the insurance.
(c) the face amount of the insurance plus legal expenses.
(d) the face amount of the insurance less the deductible.

Answer 16

(c) the face amount of the insurance plus legal expenses.

Question 17

The title company’s primary facility, which stores copies of all public records from the county in which the property is located, is the

(a) title warehouse.
(b) record warehouse.
(c) record and title warehouse.
(d) title plant.

Answer 17

(d) title plant.

Question 18

The chain of title lists

(a) only the names of the parties.
(b) only the parties subject to grant deeds.
(c) the parties and documents, such as trust or grant deed and recording date.
(d) none of these.

Answer 18

(c) the parties and documents, such as trust or grant deed and recording date.

Question 19

A patent is a deed transferring land from

(a) an inventor to the federal government.
(b) an incompetent person to one who is competent.
(c) one spouse to another.
(d) the federal or state government to a private individual.

Answer 19

(d) the federal or state government to a private individual.

Question 20

Using the Statement of Information (SI), the title searcher performs a

(a) general index run.
(b) general informational run.
(c) property boundary search.
(d) legal description verification.

Answer 20

(a) general index run.

Question 21

If a searcher discovers an error in spelling on a previously recorded deed,

(a) the title company must go to court to resolve it.
(b) the escrow company must go to court to resolve it.
(c) escrow may send a corrected deed to the grantor to sign and record.
(d) it can be ignored.

Answer 21

(c) escrow may send a corrected deed to the grantor to sign and record.

Question 22

Underwriting is defined as

(a) writing under or at the end of something.
(b) writing at the beginning of something.
(c) the process of writing a legal description.
(d) the process of writing a will.

Answer 22

(a) writing under or at the end of something.

Question 23

The preliminary title report indicates

(a) the conditions under which a lender will approve a loan.
(b) the conditions under which a title insurance policy will be offered to a buyer.
(c) the conditions under which a title insurance policy will be offered to a seller.
(d) none of these.

Answer 23

(b) the conditions under which a title insurance policy will be offered to a buyer.

Question 24

Title policies are written on the basis of a search of public records and other records that impact

(a) confirmation.
(b) constructive confirmation.
(c) constructive notice.
(d) confirmation notice.

Answer 24

(c) constructive notice.