Transfer of Title

Question 1

title has no defects/clouds to which a reasonable buyer would object; sellers can convey such title, if the title search reveals no doubt about property ownership and there are no liens/encumbrances that won’t be cleared at closing.

Answer 1

marketable title

Question 2

title in which there may be known defects (such as easements), but the title company has notified parties of the defect and has agreed to insure against it (not list it as a policy exception); key concern is that sellers who offer this title may not have to clear up title problems that come up prior to closing.

Answer 2

insurable title

Question 3

any encumbrances, such as a lien or inheritance claim, that prevents the seller from providing a clear marketable title.

Answer 3

cloud on title

Question 4

grantor holds title to and possession of the property.

Answer 4

Covenant of seisin

Question 5

grantor has right to convey both title to and possession of the property.

Answer 5

covenant of right to convey

Question 6

grantor assures the grantee that there are no encumbrances against the title other than those identified in public records or the deed itself

Answer 6

covenant against encumbrances

Question 7

grantor assures that the grantee’s use and enjoyment of the property will be unimpaired and unrestricted, subject to public police powers and private deed restrictions.

Answer 7

covenant of quiet enjoyment

Question 8

grantor promises to take whatever actions necessary (within his power) to correct any title defects.

Answer 8

covenant of further assurances

Question 9

grantor promises to protect and defend the title against lawful claims made by others.

Answer 9

covenant of warranty -or- warranty forever

Question 10

act which ensures buyers will receive an estimate of closing costs (on the LE form) from the lender within 3 days of loan application and a final disclosure of closing costs (on the CD) at least three business days before closing.

Answer 10

RESPA (Real Estate Settlement Procedures Act)

Question 11

a property that is being sold by the lender due to the buyer’s default; lender will usually sell property at auction after proper notice has been provided, and often after allowing the borrower the right to cure the default.

Answer 11

foreclosure

Question 12

property that the seller, with the lender’s permission, is selling for less than the seller owes against the property.

Answer 12

short sale

Question 13

a sale in which ownership has reverted to the lender due to a failed foreclosure sale or because the borrower surrendered ownership of the property to the lender through a deed in lieu of foreclosure.

Answer 13

REO (real estate owned)