Practice: Chapter 12 • Escrow And Title Insurance

Front 1

Some states allow the listing real
estate brokerage firm to act as the escrow agent, whereas in much of
the eastern part of the United States an __is used for real
estate closings.

Back 1

attorney

Front 2

Funds
paid at or just prior to closing must be good funds before they
can be disbursed. Good funds are readily available funds:
personal checks that have cleared, cashier’s checks, wire transfers, and __. If not "good", they must be given 10 days before close of escrow to clear the bank.

Back 2

cash

Front 3

Once a property is in escrow, the
main function of the broker is to monitor the escrow for smooth
functioning; if any problems arise, the broker should immediately
notify the parties and attempt to __ the issues.

Back 3

resolve

Front 4

Once all contingencies are waived and a “firm sale” is
made, the transfer of title will be binding on the sellers and their __.

Back 4

heirs

Front 5

In the event of the death of a seller while a property is in
escrow, the heirs could be required to complete the sale and would
receive the net __ of the sale.

Back 5

proceeds

Front 6

If a buyer dies during an escrow,
the heirs may be required to proceed with the purchase;
however, if the buyer was financing the purchase, the lender would
probably not make the loan and the sale may __ take place.

Back 6

not

Front 7

lenders, like buyers, do not want to commit their funds until they are assured that the property they are lending on has free and clear __.

Back 7

title

Front 8

Escrow statement that the seller has made an irrevocable assignment of the commission to
the broker - means broker gets paid at __. This is included in the purchase contract so that the seller can't avoid paying the RE broker.

Back 8

closing

Front 9

In California, all escrow companies must be corporations and, as
such, be licensed by the California __ of Corporations.

Back 9

Commissioner

Front 10

The following are permitted to act as escrow agents
without being licensed:
• Brokers
• Savings and loan companies
• Banks
• Title and __ companies
• Attorneys, provided they have a prior client relationship with a
__ to the escrow

Back 10

trust
party

Front 11

In northern California, the majority of escrow transactions are handled by __ insurance companies. Also, escrow instructions are not signed until immediately prior to escrow closing, whereas in southern California escrow instructions
are signed when the escrow is __.

Back 11

title
opened

Front 12

RE brokers can only act as escrow officers if they are representing the buyer, the seller, or selling their own __.

Back 12

property

Front 13

The broker cannot use a fictitious business name that contains the word escrow and cannot advertise that she provides escrow services
without specifying that such services are only in connection
with the broker’s real estate RE __.

Back 13

activities

Front 14

Any corporation that makes application for an escrow license must:

• Be financially __.
• Furnish a surety bond for $__.
• Set up a trust fund for all monies deposited in __.
• Arrange for bonding of responsible __.
• Submit to an annual independent audit at its own __.
• Keep accurate records, subject to audit at any time by the Commissioner
of Corporations and the Department of Real Estate.

Back 14

solvent
10,000
escrow
employees
expense

Front 15

Escrow officers must:
- Give to parties only that information that concerns them.
- Ensure the escrow does not close with __ funds.

Must not...
• Suggest that terms or provisions be inserted in the escrow.
- Notify parties that they have not ordered a certain __ that may be necessary to close an escrow.

Back 15

unverified
document

Front 16

Escrow order:
1. Officer receives a fully executed Purchase agreement.
2. The broker gives a copy of the purchase agreement, which also acts as escrow instructions, to the escrow officer.
3. In Southern Cal, bilateral escrow instructions are signed by all parties.
4. officer orders a title search from a title company,
which sends its report to escrow.
5. officer prepares the __ deed.
6. the deed (and escrow instructions in N Cal) is signed and held in escrow in preparation for closing.

Back 16

grant

Front 17

if separate escrow instructions
are used, once signed by all parties, the escrow instructions may take
precedence over the terms of the purchase __.

Back 17

contract

Front 18

Once signed by all parties to the escrow, the escrow instructions
can be amended only by mutual written consent of both parties, known as escrow
instruction __.

Back 18

amendments

Front 19

Escrow closure:
1. officer records prorations on a settlement sheet.
2. officer requests statement on current status of existing mortgage.
3. The title search runs right up to the last minute of
the escrow recording to ensure that nothing has been recorded
subsequent to the title __.
4. On the day the deed is recorded, the escrow officer disburses
funds to each party: sellers's __, RE brokers, title & escrow companies, inspectors and __.
5. officer sends escrow closing statements to all appropriate parties.
6. The title insurance company issues a title insurance policy within a few days.
7. Deed is __ and mailed to the new owners.

Back 19

search
lender
contractors
recorded

Front 20

A quitclaim deed is often used when one owner of a property wishes
to give up any ownership she has or may have in a property, often used by divorcing __.

Back 20

spouses

Front 21

Unlike the grant deed, which is a conveyance instrument, a deed of trust is a security instrument used to tie the promissory note that the buyer signed when she obtained a loan to the __ being used as security for the loan.

Back 21

property

Front 22

A deed of trust will also contain an assignment of __.

Back 22

rents

Front 23

Assignment of Deed of Trust: it simply gives public notice that youre __.

Back 23

selling

Front 24

Often, a Preliminary Title Search finds various liens and encumbrances recorded against the seller that
may or may not be hers. When you encounter this situation,
the title company will require your seller to fill out a Confidential
Statement of __.

Back 24

Information

Front 25

The estimated loan balance is entered into the seller’s
escrow instructions and the actual total due the lender will not be known until the escrow agent receives a written beneficiary __ from the lender prior to closing.

Back 25

statement

Front 26

As a realtor, I should get a new title and escrow fee
schedule from at least __ different escrow and title companies every
year and keep them with you for ready reference.

Back 26

two

Front 27

If the buyer is assuming an existing loan, the escrow officer will
obtain a __ statement from the one holding the note and
trust deed, showing the exact loan balance and the date to which
the loan is currently paid.

Back 27

beneficiary

Front 28

When a lender makes a new first loan, especially one in excess of
80 percent of the purchase price, it will generally require the borrower
to set up an __ account (for prop taxes, etc).

Back 28

impound

Front 29

Because interest is normally paid arrears, if a closing is set for the twentieth day of the month, the loan payment is due on the first day of the month, and the payment was paid by the seller, the seller owes the buyer twenty days’ interest for the twenty-day period that the seller __ the property but has not paid for yet.

Back 29

occupied

Front 30

Tax bill prorations are complicated for me when they havent been paid by the seller, and the buyer has to come in and pay for the entire _.

Back 30

year

Front 31

Escrow officers are
not allowed to accept __. Escrow companies do not have a duty to warn a party of
possible __.

Back 31

cash
fraud

Front 32

An abstract of title is a recorded __ of a property and
includes a summary of every recorded document concerning the property. This is how a marketable title is shown.

Back 32

history

Front 33

Defects such as unknown spousal interest, an illegal
contract, failure of delivery, forged documents in the chain of title,
or the incapacity of a grantor are __ shown in an abstract of title.

Back 33

NOT

Front 34

The CLTA policy of title insurance covers matters of record, if not specifically excluded from coverage as well as unrecorded specified risks, such as: Lack of capacity of a grantor, forgery, Failure of delivery of a prior deed, Undisclosed spousal interests, Federal estate __ liens. (FORGERYS, FAILURES, DUMMIES, and DIVORCE)

Back 34

tax

Front 35

CLTA also excludes: assessments that are not yet __, title defects hidden by the insured, zoning, water rights, mining claims, and anything __.

Back 35

liens, unrecorded

Front 36

ALTA policy (extended policy) is almost always purchased for the __'s benefit. It insures the lender for
the amount of the __ only and not the entire purchase price of the property. It costs about 10% more than __.

Back 36

lender’s
loan
CLTA

Front 37

ALTA adds: unrecorded easements and liens, mining claims, water rights, lack of access, an __. ("Easy leaning miners inspect water access")

Back 37

inspection (and covers things found by it)

Front 38

I should obtain a copy of the prelim as soon
as possible, read it thoroughly, and discuss its contents with your clients. It is delivered a couple days before __. It is not an insurance policy at all; it is
an __ to insure the title to a property, subject to listed exceptions
and on certain terms and conditions.

Back 38

closing
offer

Front 39

(RESPA) forbids a title company from providing any __ to an RE broker. Licencees/brokers can be fined $__.

Back 39

kickback
$10,000

Front 40

5. Which of the following recurring
costs can be included in an escrow?
A. Property taxes.
B. Impound account.
C. Prorated interest on any new
financing.
D. All of the above.

Back 40

D. All of the above.

Front 41

What is an abstract of title?
A. It gives the buyer more protection
than title insurance.
B. It is an attorney’s opinion of the
condition of the title to a property.
C. It reveals title defects such as
forged instruments and failure
of delivery.
D. It is a summary of most of the
recorded documents concerning
a property.

Back 41

B. It is an attorney’s opinion of the
condition of the title to a property.

Front 42

The Prelim Title Report is NOT an __ of title reporting
a complete chain of title.

Back 42

abstract