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29 Cards in this Set

  • Front
  • Back

Cloud on the Title

any item limiting or restricting ownership of the property


ie: encumbrances or title defects

Chain of Title

complete record of all recorded instruments affecting the subject property traced back to the original source

Removal options for Cloud on Title

1) unpaid lien can be paid


2) claim of missing heir or gap in chain of title might be resolved through quitclaim deed (for a price)


3) legal action can be taken with 'quiet title action'

Title Evidence

1) abstract of title


2) certificate of title


3) Torrens System (title registration)


4) title insurance

Abstract of Title

digest in chronological order of the title history


It is a full historical summary of all matters affecting the title, but provides no guarantee.

Certificate of Title

an opinion of the title without the title abstract


The certificate states that the abstractor searched the public record and found the title properly vested.

Title Registration (Torrens System)

purported owner may submit an abstract of title and file a quiet title suit.

Title Insurance

most widely used title evidence that protects the insured parties against loss by encumbrances, defective title, or other adverse claims to title.

Title Insurance Companies

regulated by state insurance commissioner to provide title insurance


A title examiner performs a title search in their title plant (their records affecting title). After the search, they issue a preliminary title report or title commitment.

Title Policies

A One Time premium for:


1) Owner's Policy


2) Purchaser's Policy


3) mortgagee's policy


4) leashold policy

Owner's Title Insurance Policy

protects the owner against adverse claims


This is for the owner, heirs, devisees in the amount of the purchase price

Purchaser's Title Insurance Policy

to protect a buyer - issued at the time the contract is initiated in the amount of contracted purchase price

Mortgagee's Title Insurance Policy

to protect a lender whose lien is secured by the borrower's property. It is up to the amount of the mortgage balance and reduces as balance is reduced

Leasehold Title Insurance Policy

to protect a tenant in a long term lease - for the term of the lease. coverage is for value of property for 50+ years or total amount fo rent if lease is <50 years.

Standard Coverage - Title Ins. Policy

protects against any item that has been made a matter of public record and hidden risks off the record (forgeries, competency, defective recording, etc)

Extended Coverage - Title Ins. Policy

usually in mortgagee's policy


standard policy + coverage of matters not in public record (adverse possessors, encroachments, items that may need a spot survey

Closing

also known as Settlement or Settlement Process when the deed is recorded and sales proceeds are delivered.

Attorney States

some states have lawyers carry out closing functions at settlement meetings

Escrow states

some states have the closing process through escrow

Escrow

process by which a deed is delivered to a third person to be delivered to the grantee


deed is considered delivered when it is placed in escrow


allows principals to the transaction to deal with each other without risk

escrow agent or escrow officer

third party that prepares escrow instructions based on the purchase and sales agreement



acts as dual agent for both buyer and seller

escrow buyer's instructions

1) the property being purchased


2) sale price & terms


3) how items are to be paid


4) the condition of the title he is to receive


5) the prorate date

escrow seller's instructions

1) how much he will collect


2) the form of payment

Additional Escrow Instructions

provide payment of:


1) taxes


2) existing encumbrances


3) broker's fee


4) document preparation fees


5) escrow fee


6) prorate date (same for seller & buyer)

Closing Statements (for buyer and seller)

buyers closing costs & credits



sellers closing costs and credits and $ he will receive from proceeds of sale

estoppel certificate

in commercial transactions this is signed by both buyer & seller to prevent one party from claiming different facts than those set out in the instruments

Accrued Interest on a New Loan

loan amount x interest rate x days from closing to end of month / 365 = accrued interest



$120,000 x 6% x 15 / 365 = $295.89

Reserves

fund to pay insurance and taxes also called escrow or impound

Foreign Investment in Real Property Tax Act

sale by a non-resident alien requires that the buyer withhold 10% of gross proceeds unless he uses it as a residence and the purchase prices <$300,000.