Title Search & Real Estate Closings Flashcards

What is a 'chain of title' in real estate?

Answer: The chronological sequence of ownership transfers for a property

The chain of title is the historical sequence of all recorded ownership transfers from the original grant to the current owner.

Which document is recorded to release a satisfied mortgage lien from the public record?

Answer: Deed of reconveyance or satisfaction of mortgage

A satisfaction of mortgage (or deed of reconveyance in deed-of-trust states) is recorded to show the lien has been paid and released.

A 'cloud on title' refers to:

Answer: Any outstanding claim or encumbrance that impairs the marketability of title

A cloud on title is any recorded or unresolved interest that casts doubt on the owner's clear ownership.

At closing, the HUD-1 Settlement Statement was replaced by which form under TRID rules?

Answer: Closing Disclosure (CD)

TRID (TILA-RESPA Integrated Disclosure) replaced the HUD-1 with the Closing Disclosure for most residential mortgage transactions.

Which type of deed provides the MOST protection to a buyer because the grantor warrants title against all prior claims?

Answer: General warranty deed

A general warranty deed includes covenants that the grantor will defend the buyer's title against any and all claims, even those arising before the grantor's ownership.

What is the purpose of a title commitment (binder) issued before closing?

Answer: To identify conditions that must be satisfied before title insurance will be issued

A title commitment outlines what the insurer found in the title search and lists requirements and exceptions before a policy will be issued.

A mechanic's lien is typically filed by:

Answer: Contractors or materialmen who have not been paid for work on the property

Mechanic's liens are statutory remedies allowing unpaid contractors, subcontractors, and suppliers to claim a security interest in the improved property.