CHCP Title Insurance & Escrow Procedures 2

Question 1

A buyer discovers after closing that a neighbor's fence encroaches 2 feet onto the purchased property. Which title insurance policy would most likely cover this loss?

Accepted Answer

Extended owner's policy with survey coverage

Answer

An extended owner's policy (ALTA Homeowner's Policy) covers survey-related issues like encroachments that a standard policy typically excludes.

Question 2

In a dry closing state, what is the key difference from a wet closing?

Accepted Answer

Documents are signed but funds are not disbursed at the closing table

Answer

In a dry closing, all documents are executed at the table but disbursement of funds is delayed until the lender reviews and approves the package.

Question 3

An escrow agent receives conflicting instructions from buyer and seller after a failed closing. What is the proper course of action?

Accepted Answer

Interplead the funds with the court

Answer

When escrow receives conflicting instructions it cannot resolve, interpleader allows the escrow holder to deposit funds with the court and let the parties litigate the dispute.

Question 4

Which endorsement to a lender's title policy protects against loss if zoning prevents the property from being used as a single-family residence?

Accepted Answer

ALTA 3.1 – Zoning Endorsement

Answer

The ALTA 3.1 Zoning Endorsement insures that the property is classified for single-family residential use under applicable zoning laws.

Question 5

What is the primary purpose of a preliminary title report (or title commitment)?

Accepted Answer

To disclose conditions under which the title company will issue a policy

Answer

A title commitment lists the conditions, exceptions, and requirements that must be met before the title company will insure the transaction.

(CHCP) Certified Home Closing Professional Practice Test

(CHCP) Certified Home Closing Professional Practice Test

CHCP Title Insurance & Escrow Procedures 2