Principles: Chapter 10 • The Role Of Escrow And Title Insurance Companies

Front 1

Specialists called __ began searching and compiling courthouse records. For a fee, they would publish their findings on a specific parcel.

Back 1

abstractors

Front 2

The extended-coverage policy is commonly referred to as an ALTA
policy. ALTA stands for American __ Title Association

Back 2

Land

Front 3

The extended-coverage policy was originally established for real estate lenders. This policy requires the title company to make a physical inspection of the property and insures against certain __ title risks excluded under the standard policy.

Back 3

unrecorded

Front 4

A chain of title is an unbroken history of all the title transfers, beginning with the document originally transferring title from the __ to private ownership and ending with the document vesting title in the current owner.

Back 4

government

Front 5

Incomplete list of BUYER closing costs:
- Pest control inspection fee
- Tax service fee (checks yearly to make sure buyer is paying prop tax)
- Hazard insurance
- Title and escrow fees in __-pays areas

Back 5

buyer

Front 6

Incomplete list of SELLER closing costs:
- Transfer tax
- Prepayment penalty
- Pest control __ and report fee
- Real estate brokerage commission
- Discount points on government-backed loans (FHA)
- Title and escrow fees in seller-pays areas
- Natural hazard __ fees

Back 6

work
disclosure

Front 7

USUALLY PRORATED BETWEEN THE BUYER AND SELLER
1. Property taxes
2. Interest if loan is assumed by buyer
3. __ if the property is tenant-occupied income property

Back 7

Rents

Front 8

The standard title insurance policy called the __ policy, which stands for California Land Title Association.

Back 8

CLTA

Front 9

Escrow companies are __
by the state of California, but individuals can "do" escrow without one.

Back 9

licensed

Front 10

An ESCROW is a process whereby a neutral third party assumes the responsibility of handling all the paperwork and disbursement of __ to close out a real estate transaction.

Back 10

funds

Front 11

The Real Estate __ Procedures Act (RESPA) is a federal law that requires certain forms to be provided regarding closing costs. Virtually all lenders fall directly or indirectly under RESPA’s rules.

Back 11

Settlement

Front 12

The standard policy is frequently referred to as a CLTA policy. There is one for the buyer, one for the __ , or one for both (joint).

Back 12

lender

Front 13

To be valid, an escrow requires a binding contract and a conditional delivery of __ instruments.

Back 13

transfer

Front 14

Who can handle escrows? Title insurance companies, institutional lenders, __, even RE brokers representing the buyer or seller.

Back 14

attorneys

Front 15

Title insurance companies search public title records, and then issue __ of title insurance.

Back 15

policies

Front 16

Recurring closing costs are prepaid items that the buyer pays in advance to help __ expenses that will continue as long as he owns the property.

Back 16

offset

Front 17

All closing costs are __ as to who will pay them. Closing costs paid by a buyer in S California might be paid by the seller in N California.

Back 17

negotiable

Front 18

California has an anti-rebate law that
prohibits title companies from __ real estate licensees for the placement of title insurance.

Back 18

paying

Front 19

Federal RESPA rules prohibit __ and unearned fees paid to real estate agents.

Back 19

kickbacks

Front 20

When offered freebies by title insurance companies, its best to just say, "__, thanks".

Back 20

no

Front 21

The __ is responsible for the day escrow closes.

Back 21

buyer

Front 22

When you make a payment, you're paying LAST MONTH's interest. In other words, interest is always paid in __.

Back 22

arrears

Front 23

EXTENDED-COVERAGE POLICY (ALTA) Risks covered:
(a) All those listed under the standard coverage policy
(b) Unperfected mechanics’ liens
(c) Unrecorded physical __
(d) Facts a correct survey would show
(e) Certain water claims
(f) Rights of parties in possession, including tenants and owners under unrecorded __.

Back 23

easements
instruments

Front 24

Risks not covered by CLTA nor ALTA:
(a) Environmental laws, zoning, and other __ ordinances affecting the use of the property
(b) Defects known to the insured before the property was insured but not revealed to __ company by the insured

Back 24

government
title

Front 25

If the parties in an escrow are in conflict and cannot agree as
to what to do, the escrow officer can bring a court action called a(n) __.

Back 25

interpleader

Front 26

The use of the HUD-1 closing statement is required by __.

Back 26

RESPA

Front 27

The title records in the office of the title company are called
a title __.

Back 27

plant

Front 28

Loan Origination Fees, or Points, are calculated on the LOAN AMOUNT! Not the purchase __.

Back 28

price

Front 29

First came Abstract of Title, then __ of Title, then __ of Title. Today we have __ of Title, which is the best.

Back 29

Certificate; Guarantee; Insurance

Front 30

An escrow officer __ give legal
advice and may bring an action in court forcing the principals in the escrow to litigate their differences. This legal action is called an interpleader action.

Back 30

cannot

Front 31

Escrow instructions are __. (secret)

Back 31

confidential

Front 32

If the escrow holder receives conflicting instructions from the
principals, the escrow officer simply __ to proceed until the parties settle their differences.

Back 32

refuses

Front 33

Escrow officers CAN draft deeds and prepare documents for __.

Back 33

recording