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45 Cards in this Set

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What is generally found on Schedule B, Section 1 to a title commitment?
Sets forth the requirements that must be met before the transaction closes in order for title insurance to be issued.
An owner's policy of title insurance insures access to and from the land.
Why does a title insurance policy make an exception for any rights or claims of parties in possession not shown by public records?
A title policy generally makes an exception for rights or claims of parties in possession because a title insurance company does not make an inspection of the property.
Schedule B of a title policy contains a list of exceptions to coverage.
What information is generally found on a Schedule B to an ALTA owner's title insurance policy?
Information generally contained on Schedule B to an ALTA owner's title insurance policy are the list of exceptions to coverage.
What are the standard title exceptions found on a Schedule B to an owner's policy?
a) Rights or claims of parties in possession not shown by public records.
b) Encroachments, overlaps, boundary line disputes, and any other matters that would be disclosed by an accurate survey and inspection of the premises.
c) Easements or claim of easements not shown by public records.
d) Any lien or right to lien for services, labor, or materials furnished.
e) Taxes or special assessments not shown as existing liens by the public records.
What information is generally found on a Schedule A to an ALTA owner's title insurance policy?
a) Date of the policy.
b) Amount of the insurance.
c) Identity of the insured.
d) Property description.
e) Estate or interest insured.
A title examination can protect a purchaser against forged signatures on deeds.
A Title insurance commitment is a contract to issue insurance once the transaction has been closed.
An ideal effective date for an owner's title policy is the date of the signing of the deed.
You are reviewing a title commitment that contains a standard exception for parties in possession. Your client does not want the standard exception to be included in the title insurance policy. What steps can you take to have the title insurance company delete the parties in possession exception?
It can be deleted either by a) providing a survey of the property showing no parties in possession. Or by b) providing an affidavit from the owner showing there are no parties in possession other than the owner.
You are involved in a real estate transaction. The sale took place on December 26, but the deed was not recorded until January 5. When you receive the owner's title insurance policy, you note that the effective date of the policy is December 26. Is this the correct effective date?
January 5 would be the correct effective date.
The amount of insurance in a title insurance policy will appear on Schedule B.
T. Sawyer has purchased a home. T. Sawyer obtained an owner's title insurance policy that insured the home to be free and clear of any liens and encumbrances. T. Sawyer after purchasing the home, sells the home to B. Thatcher. B. Thatcher does not buy title insurance. Later it is discovered that there is a mortgage on the property held by H. Finn that dates before the effective date of T. Sawyer's title insurance policy. Does B. Thatcher have any claim against the title insurance purchased by T. Sawyer? Will the result be different if B. Thatcher had inherited the property from T. Sawyer on T. Sawyer's death?
B. Thatcher has no claim against the title insurance purchased by T. Sawyer. It would be different if she inherited the property since heirs of an insured are deemed to have a continued coverage under an owner's policy of title insurance.
An owner's title insurance policy insures marketability of title, which means it ensures that the owner can sell the property.
Kim Buyer is purchasing a home. The purchase price of the home is $125,000. Kim is obtaining a loan from Acme Loan Company for $105,000. What is the amount of title insurance that Kim can purchase? What is the amount of title insurance that Acme Loan Company can purchase?
Kim - $125,000.
Acme Loan - $105,000.
What is the effective date of a title insurance policy, and why is it important?
Title insurance only insures title as of an effective date. It is important that the effective date for an owner's policy be the date of the recordation of the deed into the owner, and that for a loan policy, the effective date be the date of the recordation of the mortgage.
A title insurance policy does not insure against matters not of public record and not known to the title company.
What is a title commitment, and why is it important in a real estate transaction?
A title commitment is the agreement by a title insurance company to issue a title insurance policy once certain conditions have been met. Title insurance is essentially a post closing matter; that is, you cannot ensure that a person owns a property until he or she in fact does own the property, nor that a lender has a mortgage on the property until in fact the loan has been made and the mortgage recorded. A title commitment, howere, is a preclosing item that illustrated to the legal assistant and attorney exactly how the title insurance policy will appear once the closing has taken place.
An owner's title insurance policy is not transferable to a purchaser of the property.
Why is a review of Schedule B to a title policy so important?
Schedule B contains a list of title matters that are not insured against in the title policy. The title insurance company provides no insurance for matters shown on Schedule B. It is important to review Schedule B to make sure that a client is willing to purchase or take a loan on the property with the Schedule B exceptions.
How are exclusions from coverage on a title insurance policy different from exceptions to title?
Exclusions from coverage on a title insurance policy are standard and will be the same from policy to policy. The exclusions from coverage are not waiveable by the title insurance company. Exceptions to coverage vary from policy to polciy, depending on each title that is being insured. The exceptions to coverage can, in some situations, be waived by the title insurance company.
What risks are covered by an ALTA owner's policy?
a. Vesting of title.
b. Defects, lines or encubrances on title.
c. Access to and from property.
d. Marketable title.
Identify and discuss the three safeguards that ensure good title.
a. General warranty deed.
b. Title Examination.
c. Title insurance.
A loan policy of title insurance is not transferable.
Explain some of the general differences between residential and commercial closings.
Both have similar documentation and a similar process. The people in the commercial closing may be more experienced. Legal techniques may be more sophisticated during a commercial transaction as well as being more subject to negotiations tailored to the transaction.
Briefly describe the six steps of a real estate closing.
a) File creation.
b) Gather information.
c) Document preparation.
d) Closing.
e) Disbursement, recording, and transmittal of the closing package.
f) Final close-out.
Why is it important for a legal assistant to prepare a checklist of documents and procedures to be followed in a real estate closing.
The closing is complicated. A checklist determines the scope of the work required and is a good method to isnure all documents and requirements have been satisfied.
What is the importance of hazard and fire insurance and what is a mortgagee loss payable clause?
The value of most real property is the improvements located on the property. The insurance of the improvements is important to the transaction. A mortgage loss payable clause is an endorsement to a hazard insurance policy naming a morgagee and its address. The policy will provide that any losses under the policy will be payable to the morgagee, either solely or jointly with the owner of the property.
What information does the surveyor need to prepare a survey?
a) Legal description.
b) Previous survey information.
c) Correct names of purchaser.
d) Correct name of lending institution.
e) Any special survey requirements.
What is a prepayment fee or premium, and how is it different from a late charge?
If a loan is prepaid before maturity the lender may require a fee or premium.
Late charges are a penalty assessed for a late monthly installment of a loan.
What is the minimum documentation a seller must provide at a real estate closing?
a) Deed transferring ownership of the property.
b) Owner's title affidavit.
What is the minimum documentation a purchaser must provide at a real estate closing?
a) Adequate funds.
b) Proof of insurance.
What helpful information with respect to real estate closings can a legal assistant obtain from reviewing the loan commitment?
This is a contract to issue a mortgage loan.
a) Loan amount.
b) Interest rate.
c) Loan terms.
d) Repayment terms.
e) Prepayment terms.
f) Full property description for collateral.
g) Any other items required by the lender that must be satisfied before closing.
What helpful information with respect to real estate closings can a legal assistant obtain from reviewing the real estate contract?
The contract sets forth the obligations of the buyer and seller in regard to the transaction.
a) Names of the parties.
b) Legal description.
c) Purchase price.
d) Amount of earnest money.
e) Closing date.
f) Documents for the closing.
The contract is the main document to prepare a closing checklist.
Most contracts contain a legal description of the property.
A title examination is the last thing to be ordered for a closing.
A loan can always be prepaid before its maturity.
Most mortgage loans are repaid semiannually.
Most loan commitments are not assignable by the borrower.
A penalty for late payment of a mortgage payment is known as a late charge.
A determination as to whether property is located in a flood hazard zone is made by the title examiner.
The main document to review to prepare a sale closing checklist is the real estate contract.
Most lenders require that a copy of the hazard insurnace be provided to them at closing.
Most payments on mortgage loans are made in arrears.