title and insurance

Question 1

A public recordation of an event, meaning notice was published but not necessarily given directly to the affected parties while still technically being available in the public record
Ex. Karen’s conveyance of her deed was publicly recorded; this was constructive notice to the world that she had sold her property and that Vince was the new owner.

Answer 1

constructive notice

Question 2

Express notice given directly to a person or actual knowledge that is known
Ex. Karen told her neighbors she would be moving.

Answer 2

actual notice

Question 3

When does title officially change hands?

Answer 3

With the transfer of the deed from the seller to the buyer

Question 4

All closing documents are recorded.

true or false

Answer 4

This is false. Only the documents that impact ownership interest need to be recorded.

Question 5

A marketable title is free from any defects or encumbrances that a reasonable buyer would object to. It is not necessarily a perfect title

Answer 5

Marketable Title

Question 6

An insurable title may have known defects (such as easements), but the title company has disclosed these defects and agreed to insure against them, not listing them as policy exceptions.

Answer 6

Insurable Title

Question 7

Checks for outstanding judgments against the property at municipal, state, or federal levels, including pending civil litigation or foreclosure proceedings.

Answer 7

judgments

Question 8

a document that is used to give a buyer an overview of the title history and information about what is or isn’t covered in a title insurance policy

Answer 8

preliminary report

Question 9

a statement of opinion regarding the title’s status. This certificate can be provided by the title company or, in some states, by an attorney

Answer 9

certificate of title

Question 10

an agreement by the title insurer to issue a final title insurance policy on the property once the final settlement occurs and specific conditions are met.

Answer 10

title commitmen

Question 11

When a covered party, such as the property owner or lender, gives the title company the right to pursue the party who caused the loss, it’s called

Answer 11

subrogation

Question 12

a lawsuit filed to establish clear and undisputed ownership of real property when there are conflicting claims or uncertainties about the title. It’s a legal process used to eliminate any outstanding claims or “clouds” on a property’s title, ensuring the rightful owner has a secure and unencumbered interest.

Answer 12

quiet title action

Question 13

this transfers ownership of a property from one person to another without any warranties or guarantees about the title’s validity

Answer 13

quick claim deed

Question 14

a summary of all the legal documents related to a specific property, including deeds, mortgages, liens, and court cases. It essentially provides a history of the property’s ownership and any encumbrances or claims against it.

Answer 14

abstract of title

Question 15

A temporary insurance contract that serves as evidence that insurance coverage is in effect until the insurer either issues a regular policy or declines the risk; can be oral or written

Answer 15

binder

Question 16

A document outlining that a title insurance policy will be issued to the buyer provided certain conditions are met (usually a required payoff of liens or other title defects)

Answer 16

title commitment

Question 17

A division of expenses and income between the buyer and seller according to who owns the property before and after the sale date; the seller and buyer each pay for items, like taxes and insurance, or receive income from the property only for the days they actually own the property

Answer 17

proration

Question 18

Regulation Z definition

Answer 18

Legislation from the Truth in Lending Act that requires disclosure of terms by lenders

Question 19

Requires disclosure of all financing terms when specific trigger terms are used in advertising

Answer 19

Truth in Lending Act (TILA)

Question 20

Requires lenders, mortgage brokers, or servicers of home loans to provide borrowers with pertinent disclosures regarding the nature and costs of the real estate settlement process in a timely manner and prohibits specific practices, such as kickbacks

Answer 20

Regulation X

Question 21

The act that brought about the creation of one set of mortgage loan disclosures (the Loan Estimate and Closing Disclosure) that TILA and RESPA require

Answer 21

Dodd-Frank Wall Street Reform and Consumer Protection Act

Question 22

Consumer Financial Protection Bureau (CFPB)

Answer 22

A federal regulatory agency that oversees all financial products and services offered to consumers

Question 23

On the closing statement, what’s the term for an amount that shows up in the party’s favor?
Unset starred question

Answer 23

Credit

Question 24

Which two items will appear on a closing disclosure?

Answer 24

Credits and debits

Question 25

A distressed homeowner sells a property for less than is owed; requires lender approval

Answer 25

short sale

Question 26

A defaulting borrower voluntarily conveys the deed to the lender to avoid foreclosure

Answer 26

deed in lieu of foreclosure

Question 27

Real estate owned property; when foreclosed homes don't sell at auction, they become a what (bank-owned) property

Answer 27

real estate owned (REO)

Question 28

agreements between two or more parties. If the agreement is violated, ownership—or tenancy, in the case of a lease—can be terminated.

Answer 28

Covenants

Question 29

contingencies on which ownership of a property might be lost if the condition is violated.

Answer 29

Conditions

Question 30

a type of deed restriction imposed by a developer who wants to maintain specific standards in a subdivision that’s still under development.

Answer 30

Restrictions

Question 31

What is the name of the method that investors use to calculate their annual property deduction?

Answer 31

Straight-line depreciation

Question 32

A list of all the tenants and the particulars about the type of unit, what the tenant is paying for it, and when the lease ends

Answer 32

rent roll

Question 33

an annual budget that includes income and expenses for the operation of our building

Answer 33

operating budget

Question 34

When the projected expenses remain stable over time, we have what’s called a what

Answer 34

stabilized budget

Question 35

for things like repairs, upgrades, and capital expenses

Answer 35

Capitol reserve budget

Question 36

improvements and maintenance, like a new roof

Answer 36

capitol expenses