Unit 13: Escrow and Title Insurance

Question 1

Parties to an Escrow

Answer 1

Buyers, Sellers, and Lenders

Question 2

Broker acting as escrow conditions

Answer 2

1) Agent
or
2) Principal

Question 3

The first step to an escrow

Answer 3

Binding contract

Question 4

Escrow instructions

Answer 4

Written directions from the principals to the escrow company as to what they want.

Question 5

Amending Escrow instructions

Answer 5

Buyer and Seller must both sign

Question 6

Escrow Payment Cannot be released unless

Answer 6

1) Agreement
2) Judgement
3) Arbitration

Question 7

Recurring Costs

Answer 7

Impound account costs for taxes and insurance

Question 8

Impound Account

Answer 8

An account that is set up by the lender to pay property taxes and hazard insurance as they come due

Question 9

Demand Statement

Answer 9

Indicates the amount due to the lender from the escrow if the loan is to be paid off.

Question 10

Reconveyance

Answer 10

A document that shows that the loan is has been paid in full. The instrument used to clear the record of a deed of trust.

Question 11

Closing Costs

Answer 11

Costs that you have to pay to close the transaction.

Question 12

Prorations

Answer 12

Charging based on time

Question 13

Who is responsible for Prorations?

Answer 13

Escrow

Question 14

Debits

Answer 14

Amounts Owed

Question 15

Credits

Answer 15

Amounts entitled to receive

Question 16

Who keeps track of debits and credits

Answer 16

Escrow

Question 17

Title Insurance

Answer 17

A one-time fee is paid at the Close of Escrow. Insures marketability of title.

Question 18

CLTA policy

Answer 18

Standard policy- Protects the buyer as to matters of record and specified risks.

Question 19

ALTA

Answer 19

Provides extended coverage to the lender, not the buyer.

Question 20

Preliminary Title Report

Answer 20

Does not provide any insurance. It provides an interim response to an application for title insurance.

Question 21

A broker can act as an escrow agent when the broker

Answer 21

1) Represents the buyer in the transaction
2) Represents the seller in the transaction
3) Is a principal in the transaction

Question 22

An escrow company is prohibited from

Answer 22

Paying referral fees to anyone other than an employee of the escrow company.

Question 23

To determine the balance due on a loan, escrow requests:

Answer 23

A beneficiary statement

Question 24

The first trust deed to be assumed by the buyer is a debit or credit to the seller on a seller’s closing statement?

Answer 24

Debit

Question 25

The first trust deed to be assumed is a debit or credit to the buyer on a buyer’s closing statement?

Answer 25

Credit