CRU Insurance & Title Requirements Flashcards
6 cards from real CRU practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CRU Insurance & Title Requirements flashcards as text
What is 'title insurance' designed to protect against, unlike other forms of insurance?
Answer: Past events or defects in the title that existed prior to the policy's effective date
Title insurance is unique in that it covers losses arising from past title defects, errors, or omissions that were unknown at the time the policy was issued.
In a residential transaction, a homeowner's insurance policy typically covers which of the following?
Answer: Dwelling, personal property, liability, and additional living expenses
Standard HO policies (e.g., HO-3) cover the dwelling, other structures, personal property, loss of use, personal liability, and medical payments.
When a borrower has a condo unit, what type of insurance does the condo association typically carry that affects the underwriter's insurance review?
Answer: A master policy covering the common areas and often the building shell or walls-in
Condo associations maintain a master hazard policy; the underwriter must confirm whether it covers bare walls, walls-in, or all-in to determine gaps the unit owner's HO-6 policy must fill.
What is the significance of a 'gap' in title coverage for a residential mortgage closing?
Answer: It is the period between the title search date and the recording of the new deed and mortgage, during which intervening liens could attach
The title gap is the window between the last title search and recording; a gap endorsement or same-day recording protects against liens recorded during this period.
Which endorsement to a lender's title insurance policy protects against loss if the improvements are found to encroach onto an easement or adjacent parcel?
Answer: ALTA 9 — Restrictions, encroachments, and minerals endorsement
The ALTA 9 endorsement covers losses from violations of restrictions, damage from mineral extraction, and encroachments of improvements onto easements or neighboring property.
If a residential property is located in a Special Flood Hazard Area (SFHA) and the community does not participate in the NFIP, what must the lender do?
Answer: Decline to make the loan or accept private flood insurance meeting NFIP equivalency standards
Federal law prohibits federally regulated lenders from originating loans in SFHAs in non-participating communities unless acceptable private flood insurance is obtained.