Deck 8: Title and Insurance

Question 1

A person can acquire actual notice of a prior sale that is not recorded in the public record simply by hearing about it in a conversation.

Answer 1

True

Question 2

All of the following are methods for sellers of real estate to prove they have good title, except:

A)title insurance.
B)Torrens system.
C)Basic Form homeowners insurance HO-1).
D)abstract and title opinion.

Answer 2

C

Question 3

Title registration systems, such as the one introduced into Russia after the fall of the Soviet Union, creates the following effect(s):

A)Greater willingness by investors to undertake long-term investments.
B)Greater willingness by lenders to take real estate as collateral for loans.
C)Greater transaction costs for real estate.
D)Two of these.(a and b)
E)All of these.

Answer 3

D

Question 4

Most homeowner policies provide for liability coverage, but only for damages resulting from accidents on the homeowner's property.

Question 5

Pete purchases property from Marie, who purchased it from Doris, a minor.Pete obtains title insurance.Doris, shortly after reaching
The age of majority, wants to reclaim her property.Which of the
Following best describes the result?

A)Doris is entitled to the property and Pete may recover from the insurance company.
B)Doris is entitled to the property and Pete may not recover from the insurance company.
C)Doris is not entitled to the property because Marie sold it to Pete, but Doris is entitled to damages from Marie.
D)None of the above.

Question 6

Raven owns Blackacre.On October 10, she deeds the property to Alexis.Alexis records her deed on November 1.Raven also deeds Blackacre to Bill on October 20 and he records his deed on November 5.Assume that Bill is a bona fide purchaser.In a state that has a Race Statute whose deed will prevail?

A)Alexis' deed.
B)Bill's deed
C)Raven's deed.
D)No one's deed will prevail, since deeding property twice violates public policy.

Question 7

Although a vendor may assign his insurance coverage to a vendee, the assignment is not effective until the insurance company approves the assignment.

Question 8

Insurance practices usually provide for the full cost of repair or replacement up to policy limits in the event of loss, regardless of the size of the limits.

Question 9

Which of the following recording statutes is used the least among the states.:

A)Race.
B)Race-notice.
C)Notice.
D)None of the above.

Question 10

In many states, a grantor must acknowledge a deed before a public official such as a notary public before the deed can be recorded.

Question 11

The Torrens System which was used in many states in the 19th century, is now used in only a few states and is considered to be too expensive and burdensome as a practical alternative to existing practices.

Question 12

In order to be protected by a lender's title policy, a home purchaser must pay for the coverage.

Question 13

Under a mortgagee loss clause, if a mortgagor-owner intentionally destroys mortgaged property:

A)the mortgagee-bank cannot recover from the insurance company.
B)the mortgagee-bank can recover from the insurance company, which can then recover its loss from the owner.
C)the mortgagee-bank can recover from the insurance company, but the insurance company cannot recover its loss from the owner.
D)none of the above.

Question 14

With property insurance, an insurable interest need only exist at the time the coverage is purchased.

Question 15

Under the modern mortgagee loss clause, a mortgagee-bank will be covered by an owner's insurance policy even when the mortgagor intentionally destroys the property by arson.

Question 16

An abstract of title lists and summarizes legal instruments, such as deeds and mortgages, and renders an opinion as to their legal validity.

Question 17

The Comprehensive Form (HO-3)homeowners insurance covers all possible risks, including floods and earthquakes.

Question 18

Before recording statutes were enacted, the common law rule provided that the first purchaser to take possession had priority over other purchasers.

Question 19

X deeds his property to Y on June 1 and to Z on June 3.Z is aware of the earlier conveyance made to Y, but records first in the public record.In a "Race Statute" state, Z's deed will prevail over Y's.

Question 20

A person purchasing a home should, to protect his investment, purchase the following:

A)Title insurance.
B)Homeowner's insurance.
C)A bond for the notary public.
D)None of the above.
E)Two of the above.(a and b)

Question 21

Generally, before a deed is allowed under law to be recorded:

A)in many states it must be acknowledged by the grantee before a notary public.
B)the grantee must pay all outstanding income taxes.
C)the grantee must produce identification.
D)the grantee must prove that the grantor's signature on the deed is valid.
E)none of the above.
)

Question 22

The owner's title insurance policy developed by the American Land Title Association insures the owner against all of the following losses except:

A)when the property loses value due to zoning and building ordinances.
B)when the owner lacks a right of access to his property.
C)when the property is subject to a lien or encumbrance.
D)when the land actually belongs to someone else.
E)when the title to the land is not marketable.