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Title Insurance Exam Questions and Correct
Answers the Latest Update and
Recommended Version
Title Insurance
✓ Insured statement of the condition of title or owner ship of real property. For a one time
premium the named insured and their heirs are protected against title defects, liens, and
encumbrances existing as of the date of the policy and not specifically excluded from it.
In the event of a claim, the title company provides legal defense from the policy holder
and pays any covered losses incurred as a result of such claim.
Commitment/Binder
✓ Also called a preliminary certificate or commitment, it is a binding contract with a title
company to issue a specific title policy, showing only those exceptions contained in the
commitment and any intervening matters after the date of the commitment and prior to
the effective date of the policy. The commitment contains all information included in the
preliminary title report plus a list of requirements to insure the transaction and standard
exceptions from coverage that will appear in the policy.
What is a commitment?
✓ A. A preliminary report as to the condition of a title and a commitment to issue a title
insurance policy when certain conditions are met.
✓ B. A document issued by a title insurance company that contains the conditions under which
a policy of title insurance will be insured.
Endorsement
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✓ An addition to or modification of a title insurance policy which expands or changes
coverage of the policy, specifically fulfilling requirements of the insured.
Exception
✓ A provision in a title insurance binder or policy that excludes liability for a specific defect
or an outstanding lien or encumbrance, such a easements and restrictions.
Requirements
✓ Conditions in a title insurance binder that must be met or otherwise cleared before title
can be insured and a policy can be issued.
Encumbrance
✓ Anything which effects or limits the fee simple title to property, such as mortgages,
easements or restrictions which do not prevent alienation of the fee title by the owner.
What makes liens special encumbrances?
✓ They make the property security for the debt.
Encroachment
✓ The situation that exists when a structure is built in whole or part on a neighbor's property.
How are encroachments settled?
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✓ A. Action at law
✓ B. Courts of equity may consider a bill for the settlements of boundaries when the rights
may be established upon equitable grounds.
✓ C. Giving or selling the encroaching party an easement or lease for the lifetime of the
building or actually moving it onto the owner's own property (in the case of small
structures).
Insurance companies
✓ protect individuals and organizations from financial loss by assuming risk. They analyze
information in insurance applications to determine if a risk is acceptable and will not result
in a loss.
Underwriters
✓ must decide whether to issue the policy, the appropriate premium to charge, and write
policies the cover these risks. In making this determination, underwriters serve as the main
link between the insurance carrier and agent. An insurance company may lose business of
the underwriter appraises risks too conservatively, or may have to pay claims if the
underwriting actions are too liberal.
Chain of Title
✓ The history of passing of title ownership from the present owner back to the original
owner. The include notations of deeds, distribution from estates, certificates of death,
foreclosures, quiet title, and other recorded transfers of title.
Closing and Settlement
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✓ The closing is the final exchange in the sale and purchase of the real estate when the title
is transferred, financing documents, title insurance policies are exchanged, and costs are
paid. Some of the documents are then delivered to the county recorder to be recorded.
Who closes a title insurance transaction?
✓ Either a title company, escrow holder, or attorney.
Escrow
✓ The deposit of instruments, funds, and instructions to an independent third party to carry
out the provisions of an agreement or contract.
What is a complete or perfect escrow?
✓ When everything is deposited to enable carrying out the instructions.
When is the transfer of property or document completed?
✓ Upon fulfillment of specified conditions, whereupon the necessary deeds and other
instruments are recorded.
What is Missouri policy on transfer tax?
✓ There is no transfer tax (the tax paid by a buyer or seller each time a property is
transferred) in the state of Missouri.
Mortgager/Grantor/Borrower
|
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✓ © 2024 TestTrackers ✓ Your Success is Our Mission!
✓ Customer Support: [+254707240657]
Title Insurance Exam Questions and Correct
Answers the Latest Update and
Recommended Version
Title Insurance
✓ Insured statement of the condition of title or owner ship of real property. For a one time
premium the named insured and their heirs are protected against title defects, liens, and
encumbrances existing as of the date of the policy and not specifically excluded from it.
In the event of a claim, the title company provides legal defense from the policy holder
and pays any covered losses incurred as a result of such claim.
Commitment/Binder
✓ Also called a preliminary certificate or commitment, it is a binding contract with a title
company to issue a specific title policy, showing only those exceptions contained in the
commitment and any intervening matters after the date of the commitment and prior to
the effective date of the policy. The commitment contains all information included in the
preliminary title report plus a list of requirements to insure the transaction and standard
exceptions from coverage that will appear in the policy.
What is a commitment?
✓ A. A preliminary report as to the condition of a title and a commitment to issue a title
insurance policy when certain conditions are met.
✓ B. A document issued by a title insurance company that contains the conditions under which
a policy of title insurance will be insured.
Endorsement
|
✓ Thank You for Choosing Us! ✓ Resources & Updates: [Testtrackers - Stuvia US]
✓ © 2024 TestTrackers ✓ Your Success is Our Mission!
✓ Customer Support: [+254707240657]
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✓ An addition to or modification of a title insurance policy which expands or changes
coverage of the policy, specifically fulfilling requirements of the insured.
Exception
✓ A provision in a title insurance binder or policy that excludes liability for a specific defect
or an outstanding lien or encumbrance, such a easements and restrictions.
Requirements
✓ Conditions in a title insurance binder that must be met or otherwise cleared before title
can be insured and a policy can be issued.
Encumbrance
✓ Anything which effects or limits the fee simple title to property, such as mortgages,
easements or restrictions which do not prevent alienation of the fee title by the owner.
What makes liens special encumbrances?
✓ They make the property security for the debt.
Encroachment
✓ The situation that exists when a structure is built in whole or part on a neighbor's property.
How are encroachments settled?
|
✓ Thank You for Choosing Us! ✓ Resources & Updates: [Testtrackers - Stuvia US]
✓ © 2024 TestTrackers ✓ Your Success is Our Mission!
✓ Customer Support: [+254707240657]
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✓ A. Action at law
✓ B. Courts of equity may consider a bill for the settlements of boundaries when the rights
may be established upon equitable grounds.
✓ C. Giving or selling the encroaching party an easement or lease for the lifetime of the
building or actually moving it onto the owner's own property (in the case of small
structures).
Insurance companies
✓ protect individuals and organizations from financial loss by assuming risk. They analyze
information in insurance applications to determine if a risk is acceptable and will not result
in a loss.
Underwriters
✓ must decide whether to issue the policy, the appropriate premium to charge, and write
policies the cover these risks. In making this determination, underwriters serve as the main
link between the insurance carrier and agent. An insurance company may lose business of
the underwriter appraises risks too conservatively, or may have to pay claims if the
underwriting actions are too liberal.
Chain of Title
✓ The history of passing of title ownership from the present owner back to the original
owner. The include notations of deeds, distribution from estates, certificates of death,
foreclosures, quiet title, and other recorded transfers of title.
Closing and Settlement
|
✓ Thank You for Choosing Us! ✓ Resources & Updates: [Testtrackers - Stuvia US]
✓ © 2024 TestTrackers ✓ Your Success is Our Mission!
✓ Customer Support: [+254707240657]
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✓ The closing is the final exchange in the sale and purchase of the real estate when the title
is transferred, financing documents, title insurance policies are exchanged, and costs are
paid. Some of the documents are then delivered to the county recorder to be recorded.
Who closes a title insurance transaction?
✓ Either a title company, escrow holder, or attorney.
Escrow
✓ The deposit of instruments, funds, and instructions to an independent third party to carry
out the provisions of an agreement or contract.
What is a complete or perfect escrow?
✓ When everything is deposited to enable carrying out the instructions.
When is the transfer of property or document completed?
✓ Upon fulfillment of specified conditions, whereupon the necessary deeds and other
instruments are recorded.
What is Missouri policy on transfer tax?
✓ There is no transfer tax (the tax paid by a buyer or seller each time a property is
transferred) in the state of Missouri.
Mortgager/Grantor/Borrower
|
✓ Thank You for Choosing Us! ✓ Resources & Updates: [Testtrackers - Stuvia US]
✓ © 2024 TestTrackers ✓ Your Success is Our Mission!
✓ Customer Support: [+254707240657]
