ALTA Title Commitment 2

Question 1

Which of the following is a typical requirement found in Schedule B-I of a title commitment for a purchase transaction?

Accepted Answer

Payment and satisfaction of all outstanding taxes and assessments of record

Answer

A copy of the prior owner's homeowner's insurance policy

Answer

A zoning compliance letter from the local planning department

Answer

Proof of the buyer's income and creditworthiness

Question 2

When a title commitment includes a requirement for a 'satisfactory survey,' this typically means:

Accepted Answer

A licensed surveyor must prepare a survey meeting ALTA/NSPS Land Title Survey standards

Answer

The buyer must personally walk the property boundaries before closing

Answer

The title company will conduct its own survey at no additional charge

Answer

Any survey from any source, regardless of age or standard, will satisfy the requirement

Question 3

The 'gap' in a title transaction refers to:

Accepted Answer

The period between the commitment's effective date and the recording of the new deed and mortgage

Answer

The difference between the purchase price and the mortgage loan amount

Answer

Missing links or documents in the chain of title

Answer

The delay between the title application and issuance of the commitment

Question 4

If a seller has an existing mortgage that must be paid off at closing, this obligation would appear in the commitment as:

Accepted Answer

A Schedule B-I requirement to be satisfied at or before closing

Answer

A Schedule A notation identifying the current vested owner

Answer

A Schedule B-II exception that remains permanently in the owner's policy

Answer

A separate endorsement attached to the commitment

Question 5

When a purchase transaction is financed by a mortgage lender, the title commitment should typically name as proposed insureds:

Accepted Answer

Both the buyer (owner's policy) and the lender (loan policy)

Answer

Only the buyer, as the ultimate owner of the property

Answer

Only the lender, as the party with the primary financial risk

Answer

The real estate broker representing the buyer in the transaction

Question 6

What is the legal effect of a title commitment on the title insurance company?

Accepted Answer

It contractually obligates the company to issue the policy once requirements are met

Answer

It is a non-binding estimate with no legal obligations attached

Answer

It is a final insurance policy that provides immediate coverage

Answer

It is only binding if the buyer signs and returns the commitment

Question 7

Which statement best describes the relationship between a title commitment and the final title policy?

Accepted Answer

The commitment is a pre-closing conditional promise; the policy is issued after closing when all requirements are met

Answer

They are legally interchangeable documents with identical coverage and effect

Answer

The commitment automatically converts to a policy 30 days after the effective date

Answer

The policy must be issued before the commitment can be prepared and delivered