Ch.13 Escrow And Title Insurance
Terms in this set (14)
cash, cashier's checks, and personal checks that have cleared
impound account costs for taxes and insurance
fund containing lender estimated funds to cover taxes and insurance until the property is sold. once the sale is final and the loan is payed off, the seller is entitled to their prorated share of this fund, as well as any interest it has earned.
shows the exact balance due from the one holding the trust to be paid off or transferred at the time of sale. shows the balance and condition of the loan.
indicates the amount due to the lender from escrow if the loan is to be paid off. can include prepayment penalty.
if the seller has a loan that is not assumed by the buyer, the loan must be paid off to clear the title. the seller instructs the escrow agent to pay off the loan, for which the seller received a deed of reconveyance. a reconveyance fee is charged to the seller.
the sum the buyer and seller have to pay beyond the purchase price
shown by abstract. an abstract of title is a recorded history of the property
insures the ownership of the property (land, buildings, and minerals below the surface) against any unknown encumbrances and the items that may cloud the title.
standard [title insurance] policy
usually used by CA buyers (and only covers CA) is the CTLA (California land title association).
Covers matters of record, if not specifically excluded from coverage, as well as specified risks not recorded, such as the following:
-lack of capacity of a grantor
-undisclosed spousal interest (a grantor who claimed to be single had a spouse with community property interests)
-failure of delivery of a prior deed
-federal estate tax liens
-deeds of a corporation whose charter has expired
-deeds of an age whose capacity has terminated
excluded from coverage by the standard policy of title insurance are the following:
-defects known by the insured and not disclosed to the title insurer
-zoning (although a special endorsement is possible that a current use is authorized by current zoning)
-mining claims (filed in mining districts; legal disruptions are not required)
-taxes and assessments that are not yet liens
-easements and liens not a matter of record (such as prescriptive easements and rights to a mechanics lien)
-rights of parties in possession (unrecorded deeds, leases, options, etc)
-matters not matter of record that would be disclosed by checking the property (such as encroachment)
-matters that would be revealed buy a correct survey
-reservations in government patents
Generally in S. CA the seller pays for the standard policy of title insurance
ALTA extended [title insurance] policy
ALTA - aka - american land title association (national coverage). Generally purchased for the benefit of the lender. the buyer pays for the lender protection. it insures the lender for the amount of the loan, not the purchase price of the property. there are three basic types of ALTA's - one deals with homes described by lot, block, and tract; one deals with homes described by either metes and bonds or government survey system; and one deals with construction loans.
the extended policy covers only the lender, not the purchaser. buyers who desire extended coverage must pay for it, and there are policies from both CTLA and ATLA that do this.
In addition to coverage offered under the standard policy, the extended coverage policy includes:
-rights of parties in physical possession, including tenants and buyers under unrecorded instruments
-rights and claims that a correct survey or physical inspection would disclose
-lack of access
insurers generally require a survey before they issue an extended coverage policy of title insurance. the extended policy does NOT cover the following:
-matters known by the insured but not conveyed to the insurer
-government regulations such as zoning
-liens placed by the insured
-violations of the map act
preliminary title report
issued by the title insurance issuer prior to issuing the title insurance. identifies the title the estate or interest in the prescribed land. it also contains a list of defects, liens, encumbrances, and restrictions that would be excluded from coverage.
1. a preliminary report is an offer
2. is is NOT an abstract of title reporting a complete chain or title
3. it is a statement of the terms and conditions of the offer to issue a title policy
collection of title records
law against kickbacks to brokers for providing business, and extended to escrows as well as to title insurers.