Deck 13: Title Insurance

Question 1

A loan policy of title insurance does not insure access to and from the land.

Answer 1

False

Question 2

The owner's policy of title insurance does not insure against matters of zoning.

Answer 2

True

Question 3

A title examination can protect a purchaser against forged signatures on deeds.

Answer 3

False

Question 4

A title examination cannot protect the purchaser against a power of attorney that has expired.

Question 5

A loan policy of title insurance does insure the right of access to and from the land.

Question 6

A title examination can protect the purchaser against documents executed under a false power of attorney.

Question 7

A title examination cannot protect a purchaser against forged signatures on deeds.

Question 8

A loan policy does not exclude from coverage defects, liens, and encumbrances that have been created by the insured claimant.

Question 9

The ideal effective date for an owner's title policy is the date of the recording of the deed.

Question 10

A loan policy of title insurance does insure against matters of zoning.

Question 11

An ideal effective date for an owner's title policy is the date of the signing of the deed.

Question 12

An owner's policy of title insurance insures access to and from the land.

Question 13

The amount of insurance in a title insurance policy will appear on Schedule B.

Question 14

Schedule A of a title insurance policy contains a list of exceptions to coverage.

Question 15

An owner's title insurance policy insures marketability of title, which means it insures that the owner can sell their property.

Question 16

Marketability of title is a legal concept and does not mean that an owner can sell their property.

Question 17

An owner's title insurance policy excludes from coverage defects, liens, encumbrances, and
adverse claims created by the insured claimant.

Question 18

Title insurance covers only losses attributable to matters in existence on the date of the policy.

Question 19

A title insurance policy does not insure against matters not of public record and not known to the title company.

Question 20

Schedule B of a title policy contains a list of exceptions to coverage.

Question 21

Mechanics' liens are generally a standard exception in an owner's policy.

Question 22

A title insurance commitment is a contract to issue insurance once the transaction has been closed.

Question 23

All requirements that are necessary for title insurance to be issued are shown on Schedule A of a title insurance commitment.

Question 24

A party in possession is generally a standard exception in a loan policy.

Question 25

Mechanics' liens are generally a standard exception in a loan policy.

Question 26

All requirements for the issuance of title insurance are contained on Schedule B of a title insurance commitment.

Question 27

An owner's title insurance policy is not transferable to a purchaser of the property.

Question 28

Title insurance cannot be issued without a title insurance commitment.

Question 29

The amount of insurance in a title insurance policy will appear on Schedule A.

Question 30

A pending disbursement clause would most likely be found in a construction loan title insurance policy.

Question 31

Generally, the amount of title insurance for an owner's policy is the purchase price of
the property.

Question 32

It is not necessary for a title examination of the property to take place to issue a title insurance commitment.

Question 33

An ideal effective date for a loan policy is the date of the recordation of the mortgage.

Question 34

An insured claimant has a duty to notify the title insurance company of any title defects that may result in a claim under the insurance.

Question 35

A title insurance commitment should not be issued without a title examination of the property to be insured.

Question 36

A loan policy of title insurance is transferable.

Question 37

An owner's title insurance policy is transferable to a purchaser of the property.

Question 38

A title insurance company has an obligation to defend at its own expense any title defects that are insured by the policy.

Question 39

Any owner of the insured mortgage under a loan policy is the insured under the policy.

Question 40

A pending disbursement clause would most likely be found in an owner's policy.

Question 41

James and Paris purchased a home from David and Dana and purchased an owner's policy of title insurance in connection with the purchase. After the sale, it was discovered that David and Dana were separated at the time of the sale and Dana's signature was forged on the deed. Dana claims that the deed is void as to her half interest and demands $100,000 for her interest in the home. James and Paris file a claim with the title insurance company. Will the title insurance company protect them from Dana's claim?

Question 42

A standard mechanics' lien exception can be removed from a title insurance policy by providing the title insurance company with the following:

A) survey.
B) affidavit that no liens exist.
C) title examination.
D) pending disbursement clause.

Question 43

Which of the following matters is not insured against in a loan title insurance policy?

A) Mechanics' liens
B) Access to public road
C) Invalidity of mortgage due to usury
D) Priority of the mortgage

Question 44

Which of the following information would not be found on Schedule A to an owner's title insurance policy?

A) Effective date of policy
B) Name of the insured
C) Exception for parties in possession
D) Description of property insured

Question 45

In a title insurance policy, to insure a first priority mortgage loan, if a prior mortgage is found in the title examination, it would be located in which schedule of the title commitment?

A) Schedule B, Part 1
B) Schedule B, Part 2
C) Schedule A
D) Schedule C

Question 46

Acme Real Estate Ventures owns a small shopping center. Acme's ownership is insured by an owner's title insurance company. Acme sells the shopping center to Farris Investments. Farris reviews Acme's insurance policy showing ownership in Acme and does a title examination from the date of that policy that shows that Acme has not sold the property. Farris buys the property but does not get an owner's policy of title insurance. Later Farris discovers that Acme did not own the property, as there was a forged deed to one of the previous owners. Can Farris make a claim against the Acme policy?

Question 47

Which of the following information is found on Schedule A of an owner's policy?

A) Effective date of policy
B) Amount of insurance
C) Name of insured
D) Number of policy
E) (A) and (C)
F) All of the above

Question 48

An owner purchases a $100,000 parcel of property but only insures for $60,000. There is a partial loss under the policy of $30,000. Under the coinsurance rules, the title insurance company would be liable for the following claim:

A) $30,000.
B) $12,000.
C) $18,000.
D) $24,000.

Question 49

Which of the following risks are not insured against in an owner's ALTA policy?

A) Mechanics' and materialmen's liens
B) Access to public road
C) Title is unmarketable
D) Title is not vested in the insured

Question 50

Matters discovered from a title examination of a property would probably be found on:

A) Schedule A of a title insurance policy.
B) Schedule C of a title insurance policy.
C) Schedule B of a title insurance policy.
D) none of the above.

Question 51

Which of the following is not an exclusion to an owner's title insurance policy?

A) Matters of survey
B) Zoning and other government regulations
C) Matters created, suffered, assumed, or agreed to by the insured
D) Title defects not known to the insurance company

Question 52

A pending disbursement clause would most likely be found in:

A) a construction loan title insurance policy.
B) a loan title insurance policy.
C) anowner's title insurance policy.
D) none of the above.

Question 53

Which of the following is not a risk covered by title insurance?

A) Forged signature on deed
B) Recorded easement
C) Falsification of public records
D) Deed signed under an expired power of attorney

Question 54

Exceptions for encroachments can be deleted from a title insurance policy by providing the title insurance company with the following:

A) affidavit
B) title examination
C) survey
D) pending disbursement endorsement

Question 55

The effective date of an owner's title insurance policy should be the:

A) date the deed was signed.
B) date of recording of the deed.
C) date of title examination.
D) date of title commitment.

Question 56

An owner purchases real property for $100,000.00 and obtains a loan for $80,000.00 from a lender. An owner's title insurance policy could be purchased for the following amount:

A) $100,000.00.
B) $80,000.00.
C) $100,000.00 or $80,000.00.
D) None of the above.

Question 57

Good Fortune Company purchases land improved with a building and buys an owner' s title insurance policy in connection with the purchase. The policy is a standard policy with no special endorsements. When Good Fortune applies for a permit to open a restaurant, they are told by the city that the property does not have adequate parking under the zoning ordinance to be used as a restaurant. Does Good Fortune have any valid claim against the title insurance company because of this issue?

Question 58

Premiums for title insurance are generally payable:

A) annually.
B) monthly.
C) once at time of issuance.
D) semiannually.