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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 |
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Chain of Title |
complete record of all recorded instruments affecting the subject property traced back to the original source |
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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' |
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Title Evidence |
1) abstract of title 2) certificate of title 3) Torrens System (title registration) 4) title insurance |
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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. |
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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. |
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Title Registration (Torrens System) |
purported owner may submit an abstract of title and file a quiet title suit. |
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Title Insurance |
most widely used title evidence that protects the insured parties against loss by encumbrances, defective title, or other adverse claims to title. |
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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. |
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Title Policies |
A One Time premium for: 1) Owner's Policy 2) Purchaser's Policy 3) mortgagee's policy 4) leashold policy |
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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 |
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Purchaser's Title Insurance Policy |
to protect a buyer - issued at the time the contract is initiated in the amount of contracted purchase price |
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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 |
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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. |
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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) |
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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 |
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Closing |
also known as Settlement or Settlement Process when the deed is recorded and sales proceeds are delivered. |
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Attorney States |
some states have lawyers carry out closing functions at settlement meetings |
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Escrow states |
some states have the closing process through escrow |
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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 |
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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 |
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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 |
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escrow seller's instructions |
1) how much he will collect 2) the form of payment |
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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) |
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Closing Statements (for buyer and seller) |
buyers closing costs & credits
sellers closing costs and credits and $ he will receive from proceeds of sale |
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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 |
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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 |
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Reserves |
fund to pay insurance and taxes also called escrow or impound |
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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. |