TITLE INSURANCE UPDATED ACTUAL
QUESTIONS AND CORRECT ANSWERS
COMPREHENSIVE STUDY GUIDE
●● All of the following are characteristics of an ALTA loan policy
Answer: Exceptions
Exclusions
Conditions
●● Chain of Title
Answer: A listing of the chronological order of conveyances of a
parcel of land, from the original owner to the present owner.
●● The policy limit noted in a title insurance policy applies to
Answer: Cumulative Claims
●● Closing
Answer: The process of completing a real estate transaction during
which deeds, mortgages, leases and other required instruments are
signed an/or delivered, an accounting between parties is made, and the
money is
disbursed.
,●● Closing Protection Letters
Answer: A document issued by a title insurance company in connection
with an about-to-be-issued title insurance policy. It protects a mortgagee
who is forwarding funds to a title insurance company's agent or attorney
against an embezzlement of funds or a failure to follow specific closing
instructions
●● The title insurance Insure Closing Letter/Closing Protection Letter is
issued to the lender along with
Answer: The title commitment
●● In a deed, the borrower is the
Answer: Grantee
●● In a deed of trust, the borrower is the
Answer: Grantor
●● Commitment
Answer: The preliminary report or binder issued prior to the issuance of
a title insurance policy. Serves as title company's good faith intention to
issue policy containing the terms, conditions, exceptions, and any other
matters under which the title insurer is willing to issue its title
insurance policy.
,●● Encroachment
Answer: The extension of a structure from the real estate to which it
belongs across a boundary line and onto adjoining property.
●● Encumbrances
Answer: A claim, lien charge, or liability attached to and binding real
property.
●● Escrow
Answer: "A system of document transfer in which a deed, funds, or other
property is delivered to a third person to hold until all conditions to a
contract are
fulfilled."
●● Foreclosure
Answer: A proceeding in and out of court, to extinguish all rights, title,
and interest, of owners of property in order to sell the property to satisfy
a lien against it.
●● Gap Coverage:
Answer: Issuing title insurance is generally a two-step procedure, and
the time between those two steps. Period between closing and the
recording of title.
, ●● HUD-1 Settlement Statement:
Answer: Is a standard form in use in the United States of America which
is used to itemize services and fees charged to the borrower by the
lender or broker when applying for a loan for the purpose of purchasing
or refinancing real estate.
Borrower has right to inspect 1 day before settlement
●● Title underwriters do the following
Answer: 1. Determine risk
2. Authorize the issuance of blank endorsements
3. Authorize the settlements related to properties in bankruptcy or
foreclosure
●● Insurance:
Answer: A contract under which, for consideration, one party agrees to
indemnify another for a possible loss under certain conditions.
●● The habendum clause ("to have and to hold" clause) purpose is to
further define the rights of a grantee in a
Answer: Deed
●● Lender's Policy:
QUESTIONS AND CORRECT ANSWERS
COMPREHENSIVE STUDY GUIDE
●● All of the following are characteristics of an ALTA loan policy
Answer: Exceptions
Exclusions
Conditions
●● Chain of Title
Answer: A listing of the chronological order of conveyances of a
parcel of land, from the original owner to the present owner.
●● The policy limit noted in a title insurance policy applies to
Answer: Cumulative Claims
●● Closing
Answer: The process of completing a real estate transaction during
which deeds, mortgages, leases and other required instruments are
signed an/or delivered, an accounting between parties is made, and the
money is
disbursed.
,●● Closing Protection Letters
Answer: A document issued by a title insurance company in connection
with an about-to-be-issued title insurance policy. It protects a mortgagee
who is forwarding funds to a title insurance company's agent or attorney
against an embezzlement of funds or a failure to follow specific closing
instructions
●● The title insurance Insure Closing Letter/Closing Protection Letter is
issued to the lender along with
Answer: The title commitment
●● In a deed, the borrower is the
Answer: Grantee
●● In a deed of trust, the borrower is the
Answer: Grantor
●● Commitment
Answer: The preliminary report or binder issued prior to the issuance of
a title insurance policy. Serves as title company's good faith intention to
issue policy containing the terms, conditions, exceptions, and any other
matters under which the title insurer is willing to issue its title
insurance policy.
,●● Encroachment
Answer: The extension of a structure from the real estate to which it
belongs across a boundary line and onto adjoining property.
●● Encumbrances
Answer: A claim, lien charge, or liability attached to and binding real
property.
●● Escrow
Answer: "A system of document transfer in which a deed, funds, or other
property is delivered to a third person to hold until all conditions to a
contract are
fulfilled."
●● Foreclosure
Answer: A proceeding in and out of court, to extinguish all rights, title,
and interest, of owners of property in order to sell the property to satisfy
a lien against it.
●● Gap Coverage:
Answer: Issuing title insurance is generally a two-step procedure, and
the time between those two steps. Period between closing and the
recording of title.
, ●● HUD-1 Settlement Statement:
Answer: Is a standard form in use in the United States of America which
is used to itemize services and fees charged to the borrower by the
lender or broker when applying for a loan for the purpose of purchasing
or refinancing real estate.
Borrower has right to inspect 1 day before settlement
●● Title underwriters do the following
Answer: 1. Determine risk
2. Authorize the issuance of blank endorsements
3. Authorize the settlements related to properties in bankruptcy or
foreclosure
●● Insurance:
Answer: A contract under which, for consideration, one party agrees to
indemnify another for a possible loss under certain conditions.
●● The habendum clause ("to have and to hold" clause) purpose is to
further define the rights of a grantee in a
Answer: Deed
●● Lender's Policy:
