Unite 8 - part 2

Question 1

title search

Answer 1

A title search is an examination of the public records to determine whether any defects exist in the chain of title.

Question 2

abstract of title

Answer 2

A abstract of title is a summary report of what the title search found in the public records.

The report lists all recorded documents chronologically from the root to the present time, and lists all liens and encumbrances along with their current status.

Question 3

abstractor

Answer 3

A title search is usually done by an abstractor, who summarizes the information as an abstract of title

Question 4

Marketable Title

Answer 4

A marketable title is one that has no defects in the title record and is not contingent on dubious law or facts.

Question 5

qualities of a marketable title

Answer 5

• has no defects in the title record
• that it will not give rise to litigation (lawsuit)
• won’t interfere with the buyer’s enjoyment of the property
• the buyer will have no problem selling the property in the future.

Question 6

Proof of ownership

Answer 6

Proof of ownership is evidence that title is marketable. A deed by itself is not considered sufficient evidence of ownership.

Question 7

3 ways commonly used to prove ownership (and marketable title)

Answer 7

1. a certificate of title
2. title insurance
3. Torrens certificate

Question 8

A certificate of title

Answer 8

A certificate of title is an opinion by a title company, licensed abstractor, or an attorney that the title is good on a specific date based on the information in the title record and other public documents. Similar to a certificate of title and often used in place of it is a title abstract.

A certificate of title is not a guarantee of ownership. It certifies the condition of the title.

under color of title — because of some defect, the title has not been legally conveyed.

Question 9

Title insurance

Answer 9

Title insurance is a contract under which the policyholder is protected from losses arising from defects in the title.

Most real estate buyers and lenders require the purchase of title insurance, which protects mainly against hidden defects.

Question 10

types of title insurance policies

Answer 10

An owner’s policy is issued for the benefit of the owner (new buyer) and is issued for the property’s purchase price.

A lender’s policy (mortgagee policy) is issued for the benefit of the mortgage lender and the amount of the mortgage loan will determine the amount of the coverage.

Question 11

The Torrens system

Answer 11

The Torrens system is a title registration system that eliminates the need to do a title search. In the few states that still use the Torrens system, the buyer of a property proves and registers his ownership at the court of the county in which the property is located. The registrar of titles then issues a Torrens certificate certifying that the registered owner has clear title to the property.

The original Torrens certificate of title in the registrar’s office reveals the owner of the land and all mortgages, judgments, and similar liens. It does not, however, reveal federal or state taxes and some other items.