Title Insurance Policies

Question 1

In California, the standard policy is the
(a) American Land Title Association (ALTA) policy
(b) American Land Title Organization (NLTO) policy
(c) California Land Title Association (CLTA) policy
(d ) California Land Title Organization (CLTO) policy

Answer 1

(c) California Land Title Association (CLTA) policy

Question 2

The provision in the CLTA policy that obligates the title insurer to pay the insured for a claim, or defend the insured against claims, on or to the title by others, is referred to as the

(a) Insured clause
(b) Insurance clause
(c) Insuring clause
(d) Insurer’s clause

Answer 2

(c) Insuring clause

Question 3

Some claims the title insurance will not cover include

(a) Defects created by the insured
(b) Defects known to the insured but not specified in writing to the underwriter
(c) Defects but no loss or damage is suffered by the insured
(d) All the above

Answer 3

(d) All the above

Question 4

A standard title policy provides only limited coverage, but there are additional claims that the title company may honor including

(a) Some Items that are not recorded
(b) Those items the title insurance underwriter would have known no matter what
(c) Both a and b
(d) Neither a nor b

Answer 4

(a) Some Items that are not recorded

A standard title policy provides only limited coverage, but there are additional claims that the title company may honor. This additional protection is limited to items that are not recorded and those the title insurance underwriter would have no way of knowing without additional research or some sort of physical inspection of the property and which represent risks to the title insurance company.

Question 5

An American Land Title Association (ALTA) policy generally

(a) Offers less coverage than that provided by CLTA policies
(b) Offers extended coverage over and above that provided by CLTA policies
(c) Offers exactly the same coverage as CLTA policies but only for lenders
(d) Offers no protection for “off-record” matters

Answer 5

(b) Offers extended coverage over and above that provided by CLTA policies

Question 6

All the following are true regarding matters disclosed by a current survey and therefore covered by an ALTA policy except

(a) Natural watercourses through the property
(b) Unrecorded easements
(c) Encroachments
(d) Licenses

Answer 6

(d) Licenses

Matters disclosed by a current survey, including shortages (or overages) in lot dimensions,
natural watercourses through the property,
unrecorded easements, and
encroachments.

Question 7

All the following are claims not covered by ALTA policies except

(a) Rights of eminent domain
(b) Liens created by the insured
(c) Defects known to the insured and specified in writing to the underwriter
(d) None of the above

Answer 7

(c) Defects known to the insured and specified in writing to the underwriter

Defects known to the insured, but NOT specified in writing to the underwriter by the specified date.

Question 8

The TSG is provided by a title company

(a) In the county where the borrower is located
(b) Provides information regarding delinquent real estate taxes
(c) Provides the judicial district in which the borrower is located
(d) Liens recorded against the borrower

Answer 8

(b) Provides information regarding delinquent real estate taxes

The TSG is provided by a title company in the county where the property is located and alerts the trustee to the following matters:
New owners
Delinquent real estate taxes
Notice of default recorded by a senior deed of trust. You should contact the senior beneficiary to determine if their loan is still delinquent
The city or judicial district in which the land is located

Question 9

The designation as a title company’s “ATO” means he or she is

(a) An Accredited Title Officer
(b) An ALTA Title Officer
(c) An Advanced Title Officer
(d) An Advisory Title Officer

Answer 9

(d) An Advisory Title Officer

Question 10

An ALTA policy may have additional protection coverage identified by other forms included with the policy and referred to as

(a) Addenda
(b) Appendices
(c) Endorsements
(d) Add-ons

Answer 10

(c) Endorsements

Question 11

Escrow instructions must provide for the Bureau of Indian Affairs (BIA) fees and approvals involved in the lease of land, with a maximum term for most lands of

(a) 25 years for most lands
(b) 99 years for some lands
(c) Both a and b
(d) Neither a nor b

Answer 11

(c) Both a and b

Question 12

In the foreclosure process under a deed of trust, it begins with the

(a) Beneficiary filing and recording the notice of foreclosure (NOF)
(b) Trustee filing and recording the notice of foreclosure (NOF)
(c) The Beneficiary filing and recording the notice of default (NOD)
(d) The Trustee filing and recording the notice of default (NOD)

Answer 12

(d) The Trustee filing and recording the notice of default (NOD)

Question 13

A lender who foreclosures judicially and who receives less than the amount of the unpaid loan balance due at the time of the trustee’s sale may be entitled to seek

(a) A default judgment
(b) A deficit judgment
(c) A debtor’s judgement
(d) A deficiency judgment

Answer 13

(d) A deficiency judgment

Question 14

A title insurance endorsement, “Construction and Property Boundaries” ensures a lender that the

(a) Property is constructed in accordance with California building codes
(b) Property is not encroached upon by another’s buildings
(c) Property’s foundations under construction are within the boundaries of the insured land
(d) Property’s improvements are anchored to the foundation

Answer 14

(c) Property’s foundations under construction are within the boundaries of the insured land

Question 15

An ALTA extended coverage loan policy differs from the standard coverage policy by offering

(a) insurance against matters not of public record.
(b) a smaller deductible.
(c) fire insurance.
(d) flood insurance.

Answer 15

(a) insurance against matters not of public record.

Question 16

A lender who discovers that the borrower’s property has no access to a public street would be protected under

(a) A CLTA policy.
(b) a LCTA policy.
(c) an ALTA extended coverage policy.
(d) could not be covered.

Answer 16

(c) an ALTA extended coverage policy.

Question 17

Conditions that would NOT be covered under an ALTA policy include

(a) defects such as liens created by the insured.
(b) defects known to the insured but not specified in writing to the underwriter.
(c) defects, but no loss or damage is suffered by the insured.
(d) all of these.

Answer 17

(d) all of these.

Question 18

The CLTA standard title policy is

(a) seldom issued.
(b) the least policy issued.
(c) the most frequent type of policy issued.
(d) none of these.

Answer 18

(c) the most frequent type of policy issued.

Question 19

The CLTA standard title policy

(a) never includes any coverage for off-record matters.
(b) includes coverage for all off-record matters.
(c) includes coverage for forgery and fraud.
(d) is the most expensive.

Answer 19

(c) includes coverage for forgery and fraud.

Question 20

Conditions that would NOT be covered under the CLTA policy include

(a) defects such as liens created by the insured.
(b) defects known to the insured but not specified in writing to the underwriter.
(c) defects, but no loss or damage is suffered by the insured.
(d) all of these.

Answer 20

(d) all of these.

Question 21

The additional coverage offered by an ALTA policy includes which of the following?

(a) Matters disclosed by a physical inspection of the premises not previously disclosed by public record
(b) Matter disclosed by inquiry of the occupants of the property, which might disclose off-record matters
(c) Matters disclosed by a current survey
(d) All of these

Answer 21

(d) All of these

Question 22

Encumbrances against a property consist of

(a) taxes, assessments, and liens, as well as building restrictions, encroachments, easements, and pending legal actions.
(b) off-record matters, such as zoning restrictions and proposed assessments.
(c) both (a) and (b).
(d) neither (a) nor (b).

Answer 22

(a) taxes, assessments, and liens, as well as building restrictions, encroachments, easements, and pending legal actions.

Question 23

Eminent domain is

(a) the process whereby a citizen claims title to public land.
(b) exercisable by the government only if the land owner agrees.
(c) the power of the government or a quasi-public agency to take private property for a public use upon payment of just compensation.
(d) the ability of a public agency to take private land with no compensation paid.

Answer 23

(c) the power of the government or a quasi-public agency to take private property for a public use upon payment of just compensation.

Question 24

The trust deed is

(a) seldom used by lenders in California.
(b) almost exclusively used by lenders in California.
(c) use to convey title but without representations of encumbrances on title.
(d) used to convey title from one spouse to another.

Answer 24

(b) almost exclusively used by lenders in California.