CHCP Post-Closing Procedures & Recording 3 — Questions and Answers
Question 1: A deed is notarized but the notary's commission has expired. What is the most likely consequence for recording?
- The deed records without issue
- The county may reject the deed for recording (Correct answer)
- The deed is valid but uninsurable
- The buyer loses title automatically
Correct answer: The county may reject the deed for recording
Most county recorders require notarization by a currently commissioned notary; an expired commission can result in rejection of the document.
Question 2: After closing, the closing agent must retain transaction records for a minimum period typically mandated by state law. This obligation is known as:
- Chain of title requirement
- Escrow reconciliation standard
- Record retention requirement (Correct answer)
- Document indexing rule
Correct answer: Record retention requirement
State laws and RESPA regulations impose record retention requirements on closing agents, commonly five to seven years depending on jurisdiction.
Question 3: If a closing package is sent to the county recorder and returned due to a missing grantor signature, the closing agent should:
- Re-record immediately with only the grantee's signature
- Contact the grantor to obtain a properly executed replacement deed (Correct answer)
- Request the recorder waive the requirement
- Cancel the transaction
Correct answer: Contact the grantor to obtain a properly executed replacement deed
A deed missing the grantor's signature is legally defective and must be re-executed by the grantor before re-submission for recording.
Question 4: Which instrument is typically used to transfer title to real property from a deceased person's estate to an heir?
- Warranty deed
- Sheriff's deed
- Personal representative's deed (Correct answer)
- Trustee's deed
Correct answer: Personal representative's deed
A personal representative's deed (or executor's/administrator's deed) is used to convey property from an estate to a beneficiary or heir.
Question 5: What does 'time is of the essence' mean in the context of post-closing recording?
- The recorder charges rush fees
- Delays in recording can allow intervening liens or interests to gain priority (Correct answer)
- Recording must occur within 24 hours by law
- The seller can rescind if recording is delayed
Correct answer: Delays in recording can allow intervening liens or interests to gain priority
Prompt recording is critical because an unrecorded deed may be defeated by a subsequent bona fide purchaser or creditor who records first.
Question 6: A post-closing title search reveals an undiscovered mechanic's lien filed just before the deed was recorded. Who typically bears this risk?
- The buyer bears it with no recourse
- The seller must cure it from proceeds already disbursed
- The title insurer under the owner's policy, subject to policy terms (Correct answer)
- The closing agent personally
Correct answer: The title insurer under the owner's policy, subject to policy terms
An owner's title insurance policy covers post-closing claims like undiscovered mechanic's liens that attached before the policy date, per policy terms.
Question 7: Which post-closing task ensures that escrow funds held for property taxes and insurance are properly accounted for?
- HUD-1 reconciliation
- Escrow account analysis or annual escrow statement (Correct answer)
- Good faith estimate review
- Commitment letter audit
Correct answer: Escrow account analysis or annual escrow statement
RESPA requires lenders to provide an annual escrow account statement disclosing all activity and projecting future disbursements.
CHCP Post-Closing Procedures & Recording 3
A deed is notarized but the notary's commission has expired.
What is the most likely consequence for recording?