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 common Schedule B-I requirement is that all outstanding taxes and assessments must be paid or satisfied before the title company will issue its policy.

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

A survey requirement typically calls for an ALTA/NSPS Land Title Survey prepared by a licensed surveyor to identify boundary issues, encroachments, and other physical conditions.

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 'gap' is the period between the commitment's effective date and the actual recording of the new deed/mortgage, during which new liens could be recorded without the insurer's knowledge.

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

An outstanding mortgage that must be satisfied before the policy can issue is listed as a requirement in Schedule B-I because it must be cleared to convey clear title.

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

A financed purchase typically results in two title policies: an owner's policy for the buyer and a loan policy for the lender, so both are named as proposed insureds.

ALTA - American Land Title Association Practice Test

ALTA - American Land Title Association Practice Test

ALTA Title Commitment 2