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Kentucky Real Estate Exam > Transfer of Title > Flashcards

Transfer of Title Flashcards

1
Q

What is title insurance?

A

insurance that protects buyers and lenders (through separate policies) against financial loss that might be incurred because of title defects discovered after closing

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2
Q

How much financial protection does title insurance protect a lender from?

A

The amount of the mortgage

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3
Q

What is a title abstract?

A

A summary of the property’s title history

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4
Q

What is a grantor-grantee index?

A

The chain of a title - when a gap exists, it must be resolved before a clear title can be given

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5
Q

What are the two standards of titles?

A

Marketable and insurable

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6
Q

What is a marketable title?

A

a title that has no defects or clouds to which a reasonable buyer would object

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7
Q

What is an insurable title?

A

a title that has known defects (such as an easement) that the title company has notified all parties of - but still agrees to insure the title

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8
Q

What is a cloud on title?

A

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

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9
Q

What is the most common title defect?

A

The seller’s mortgage lein

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10
Q

What is a deed?

A

A written and signed legal instrument of conveyance

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11
Q

What does a deed do?

A

Legally transfers (conveys) title to real property from the owner (grantor) to the new owner (grantee)

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12
Q

What are the most common types of deeds?

A

general warranty, special warranty, and quitclaim deeds

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13
Q

Which deed provides the greatest warranty to buyers?

A

general warranty deed

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14
Q

What are the six covenants of the general warranty deed?

A

covenant of seisin, covenant of right to convey, covenant against encumbrances, covenant of quit enjoyment, covenant of further assurances, covenant of warranty or warranty forever

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15
Q

When is a special warranty deed most commonly used?

A

Commercial properties

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16
Q

What is a deed in trust?

A

A deed that conveys real estate to a trustee or the beneficiary named in the trust agreement

17
Q

What must a deed include?

A

a grantor, grantee, act of conveyance, named consideration, legal description, limitations or clauses, habendum clause, grantor’s signature, acceptance by the grantee, acknowledgement (notarized signature)

18
Q

When and where is the deed recorded?

A

once the grantor’s signature has been acknowledged, the jurisdiction in which the property is located

19
Q

Who files the form 1099-s?

A

The escrow agent

20
Q

What are typical prorations?

A

property taxes and HOA fees, fuel, water and sewer charges

21
Q

What are accrued prorate items and how will they be handled on closing day?

A

items the seller owes on closing day that will eventually be paid by the buyer, they appear as debit’s in the seller’s column and credits in the buyer’s column

22
Q

What are examples of accrued prorate items?

A

unpaid current property taxes

23
Q

What are pre-paid prorate expenses and how will they be recorded on closing day?

A

expenses already paid by the seller, but they buyer should pay a portion of, these items are credited to the seller, and debited to the buyer.

24
Q

What are examples of pre-paid prorate expenses?

A

pre-paid real estate taxes and utilities paid in advance

25
Q

What is a TRID-required settlement document normally called?

A

The closing disclosure

26
Q

Who prepares the CD?

A

The closing officer

27
Q

What law requires that buyer’s receive a loan estimate no later than 3 days of the loan application?

A

The RESPA, real estate settlement procedures act

28
Q

What do the loan estimate and closing disclosures form?

A

The TRID, or TILA/RESPA Integrate Disclosures

29
Q

TRID disclosures are required by what law?

A

The Dodd-Frank Act

30
Q

TRID’s are only required for what mortgages/lines of credit?

A

Federally regulated mortgages

31
Q

property transfer fees that aren’t included in the sales price are called:

A

closing costs

32
Q

foreclosures and short sale transactions are referred to as _____ sales

A

distressed

33
Q

A foreclosure is a sale performed by the

A

lender

34
Q

A short sale is a sale where the asking sale price is lower than the ____

A

mortgage amount

35
Q

There is a higher risk of ______ on a title from a short sale

A

encumbrances

36
Q

A REO is also known as a distressed sale, and is what occurs when

A

ownership of a property has reverted to the lender

37
Q

What two types of loans require a home warranty on new construction homes?

A

FHA and VA

Kentucky Real Estate Exam (8 decks)

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