Flashcards in Virginia Title Records (9) Deck (32)
Consumer Real Estate Settlement Protection Act? (CRESPA)
persons conducting settlement services comply with consumer protection safeguards
-handling of settlement funds.
CRESPA provides specific language that is to be included in all contracts for the purchase of real estate containing not more than ___________________.
4 residential dwelling units
How is the language presented in all contracts for CRESPA?
What 2 concepts are included under CRESPA within the contract?
1) Purchaser's right to select the settlement agent
2) Settlement agent's role and limitations
Disbursement of funds
Fulfillment of lender instructions
T/F. Even if settlement agents do not practice law in Virginia, they are able to provide legal advice?
Regarding settlement, a person licensed under Chapter 21 of Title 54.1, or such licensee's employees or independent contractors, may perform escrow, closing, or settlement services, as defined by CRESPA, to facilitate the settlement of a transaction in which the licensee is involved so long as what?
- so long as they are not named as the settlement agent on the settlement statement
- the licensee is otherwise not prohibited from performing such services by law or regulation.
Describe 4 characteristics of the VA Settlement Agent?
1) will usually be either an attorney or a title company
2) must be registered with the Virginia State Bar
3) carry errors and omissions or malpractice insurance at a minimum of $250,000
4) maintain a surety bond of not less than $100,000
T/F. In VA, interest may be earned on funds deposited in connection with any escrow, settlement, or closing?
False. Interest may NOT be earned
Regarding title examination, the seller is required to have ____________ at the time of settlement and must be given a reasonable time to correct any title defects found before settlement.
T/F. An important function of the settlement agent is to obtain a title examination
In regards to title procedure, title examinations may be classified as___________or ___________searches. In a ___________, the seller's title must be established for at least ___________. A _______________ is a title examination that goes back ______________.
fewer than 60 years
A ______________ consists of consecutive terms of ownership; a gap in the chain could be caused by an unrecorded deed, a name change, an unadministered estate, a foreign divorce decree, or some other circumstance. Unless the missing link can be reconstructed from reliable sources, the defect could destroy the closing.
chain of title
Cures errors such as an erroneous legal description, a misspelled name, or an improper execution in a prior recorded deed in the seller's chain of title which must be corrected before the closing can proceed.
At a minimum, what should a title report reveal? (9)
1) title holder
2) legal description of property;
3) existing lenders;
4) other lienholders (such as mechanics' lienors, judgment lienors, and tax lienors);
5) status of taxes;
6) easements, covenants, and other restrictions;
7) objections to marketability;
8) other matters affecting title; and
9) requirements for vesting marketable title in the purchaser.
T/F. Regarding title insurance, if a purchaser is obtaining a loan secured by a deed of trust on the property, and the lender requires that a lender's title insurance policy be provided, this policy protects only the lender's interest and will diminish in protection as the loan is paid down?
_____________ constitute liens against all _______________ that the defendant owns or subsequently acquires. If the seller denies being named in the judgment, and it is not certain that the judgment is against the seller, an _____________ to this effect may be sufficient to protect the purchaser.
T/F. Regarding judgements, if property has been subsequently conveyed, judgments against prior owners of property may NOT remain as valid liens against the property
False. Prior judgements remain as valid liens against the property, even if property is conveyed.
Regarding judgements, the purchaser should require that the seller satisfy all judgments against the property because they remain as liens against the property for __________ and are subject to execution.
Regarding deeds of trust, a real estate licensee should be aware that it is not unusual for a title examiner to discover an unreleased deed of trust on the property. Most often why is this the case?
Most often because of failure of the lender or closer to have a certificate of satisfaction or deed of release signed by the beneficiary and recorded in a timely manner.
Reported mechanics' or materialmen's liens must be treated as adverse claims against the property. Unreported liens are also of concern to the purchaser, who will take the property "subject to" all mechanics' and materialmen's liens for work or materials furnished within the last ____________.
An affidavit that there have been no improvements performed or materials supplied within the 90 days prior to the date of closing and is required by all lenders and title insurance companies.
T/F. Regarding title issues and insurance, Mechanics' liens are generally covered by standard title insurance?
False. insurance carriers will provide this coverage for an additional premium.
The ________________ applies to transactions involving ________________ loans secured by _________ deeds of trust on real estate containing not more than ___________ residential dwelling units. The act applies only to __________ regularly engaged in making loans secured by real estate.
Wet Settlement Act
In regards to the Wet Settlement Act, when must the lender disburse the loan proceeds to the settlement agent?
At or before the loan closing
T/F. A lender may charge or receive interest on the loan before disbursement of the loan funds and before the loan closing has occurred?
What is the time period for which the settlement agent, considering he/she has the deed, deed of trust, and any other necessary documents recorded, may disburse the settlement proceeds?
within 2 business days of settlement
A settlement agent or attorney may not disburse any loan funds prior to what?
recording the deed of trust or other security instrument perfecting the lender's security instrument.
T/F. In VA, the seller WILL receive his or her equity, and the real estate professional WILL receive a commission check at the closing?
False. All funds will be disbursed after the documents are recorded by the settlement agent.
What is a person entitled if he/she suffers a loss because of the failure of a lender or settlement agent to disburse funds as required by law?
-double the amount of any interest collected
-reasonable attorney's fees