Real Estate License Transfer of Property 5

Question 1

Title insurance protects the insured against losses arising from:

Accepted Answer

Defects in the title that existed before the policy date

Answer

Title insurance covers covered title defects that existed prior to the policy's issuance.

Question 2

A chronological history of all recorded documents affecting title to a parcel is called the:

Accepted Answer

Chain of title

Answer

The chain of title traces successive ownership transfers through recorded documents.

Question 3

A condensed summary of the public records affecting title, prepared by a title company, is known as a/an:

Accepted Answer

Abstract of title

Answer

An abstract of title is a summarized history of all recorded documents on a property.

Question 4

An opinion that title is free from significant defects and reasonably safe to accept is referred to as:

Accepted Answer

Marketable title

Answer

Marketable title is reasonably free of defects and acceptable to a prudent buyer.

Question 5

Which type of title insurance policy protects the lender's interest in the property?

Accepted Answer

Mortgagee's policy

Answer

A mortgagee's (lender's) policy protects the lender up to the loan balance.

Real Estate License Practice Test