FREE ALTA Title Insurance Practices Questions and Answers

Question 1

Upon what must a title insurance policy be based in most jurisdictions?

Accepted Answer

A reasonable examination of the record title.

Answer

A calculated risk of a known title defect.

Answer

The payment of an annual premium.

Answer

A waiver of tort liability from the insured.

Question 2

An insurance broker's first duty is to his insured; the agent's first duty is to the agent's _____________?

Accepted Answer

Underwriter

Answer

Insured

Answer

Insurer

Answer

Company

Question 3

Which of the following statements is NOT true of title insurance?

Accepted Answer

It is a guarantee that the title is clear.

Answer

It only requires a one-time payment of the premium.

Answer

It involves risk elimination or minimization.

Answer

It covers attorneys' fees for the legal defense of title.

Question 4

Which of the following IS regulated by RESPA?

Accepted Answer

The purchase of a residential condominium unit with a mortgage.

Answer

A cash purchase of a residential property.

Answer

The refinance of a first mortgage on a commercial property.

Answer

The purchase of an industrial property.

Question 5

At the conclusion of closing, $1,000 of the buyer's money is placed in an escrow account by the title insurance agent closing the transaction pending the resolution of an issue involved in the purchase of a property.  To whom does the $1,000 held in escrow belong?

Accepted Answer

No one. The disposition of the money is governed by the escrow agreement.

Answer

The Buyer

Answer

The Seller

Answer

The Title Insurance Agent

Question 6

A security instrument in real estate generally secures an obligation of the borrower to repay a ________________.

Accepted Answer

Bond or note

Answer

Sale's agreement

Answer

Deed

Answer

Easement or right of way

Question 7

Which of the following is NOT a common form of security instrument for real property in one or more states?

Accepted Answer

A deed of conveyance

Answer

A mortgage

Answer

A security deed

Answer

A deed of trust

Question 8

What is the common instrument used to convey title to real property?

Accepted Answer

A deed

Answer

A mortgage

Answer

A note

Answer

A bond

Question 9

Most laws regarding title to real property are set at the _________ level of government.

Accepted Answer

State

Answer

Municipal

Answer

National

Answer

International

Question 10

In most states, the body of law made by published decisions of appellate courts is called what?

Accepted Answer

The Common Law

Answer

Civil law

Answer

Res Judicata

Answer

Estoppel