Session 5
How many days of interest remain in the month for a July 16 closing under a Calendar Year? How about a Statutory Year?
16 & 15
A homeowner who resides on the banks of the Apache Wash Basin in North Phoenix suffers catastrophic damage to their home due to flooding from the 100 year floods in 2018. They would be covered if they had flood insurance which is backed by which government agency?
FEMA
How can a buyer of real property ensure the validity or quality of a sellers title?
Preview the title report looking for defects
The CLUE Report provided by the seller would identify what type of defects:
Previous Claims made to Insurance
In escrow, a buyer must provide funds to purchase the property, what must the seller provide?
Proof of ownership/ marketable title
What does Private Mortgage Insurance do?
Protects the lender against borrower default Feedback
What is not a seller's duty in escrow? a. Provide financing options to the buyer b.Disclose mortgages or known liens c.Complete owner's declaration and seller's information sheet d.Provide marketable title
a. Provide financing options to the buyer
An Escrow Agents duties include all of the following except? a.Negotiating closing costs b.Acting as a Notary for buyer and seller c.Collecting loan documents d.Preparing settlement statements
a. negotiating closing costs
What best descibes a Deed?
A Deed is a written instrument that is used to convey real property ownership. It's signed by the Grantor and delivered to the Grantee.
How is a CLUE report used?
CLUE report helps potential buyers understand the history of a home before they buy.
Statutory Year
"360 days, each month has 30 days"
Calendar Year
"365 days, each month has actual number of days"
Escrow
"A third party that has a neutral non-interested position in the sale"
Impound Account
"An account set up and maintained by the mortgage company to collect insurance and tax payments on behalf of the owner"
Title Endorsement
"An addition or limitation of coverage that is attached to a title insurance policy."
Debit
"Any Charge or Cost" (Use a Debit Card at a store when you pay for something)
Credit
"Any money you get back" (Stores 'credit' you when you return something)
Cloud On Title
"Any type of hindrance or encumbrance that might invalidate or impair the title to real property or make the title doubtful."
CLUE
"Comprehensive Loss Underwriting Exchange"
Prorated
"Divide or distribute money evenly depending on usage of items or service"
Buyers
"Grantee (Receiv-ee)"
Sellers
"Grantor (Giv-or)"
Fiduciary
"Involving trust, especially with regard to the relationship between a trustee and a beneficiary."
Deed
"Legal document signed by the seller or grantor of real property used to convey ownership rights"
Innocent Purchaser
"No reasonable reason to suspect any problems with property"
Budget Loan (PITI)
"Payments include Principal, Interest, Taxes and Insurance"
Bona Fide Purchaser
"Rights to retain ownership of property against someone else's future claims"
Subrogation
"Title companies clause giving them the right to take legal action against any third party responsible for their losses for which a claim has been paid. (the title insurance company can recoup looses they paid to protect the new buyer/owner)"
Quiet Title Action
"To establish free-and-clear ownership of the property, and to resolve any defects or clouds found in a property title search"
Laws of Decent
"Who, according to the state gets the property when the legal owner(s) die, or a manner of distributing the assets to the heirs."
Which document would be used to assist the county assessor in determining property values?
Affidavit of Value
What does it mean when a cloud is on a title?
Cloud on Title is any type of hindrance or encumbrance that might invalidate or impair the title to real property or make the title doubtful.
A seller paid her property taxes upfront for the year. In late September of that same year she sold her property. The seller is entitled to a _________ for roughly _______ months?
Credit, 3 months
What best describes a Debit and a Credit?
Debits are charges or a cost and could be a charge to either the buyer or seller. A Credit is money received and again could go to either the buyer or seller, usually for money back as a refund for something already paid for.
Which party would be responsible for handling of all monies in a real estate conveyance?
Escrow Agency
Earnest money is held in what type of account?
Escrow account
Who chooses the escrow company?
Escrow companies are normally chosen by the buyer in the transaction but is negotiable.
Which party in a transaction can claim a loss as a result in a title defect?
Grantee
An Escrow Agent notices a discrepancy in the documents provided from the seller. Who must the escrow agent receive clarification from?
If there is a discrepancy in the documents, agent will need clarification from all parties
When the IRS is owed money and takes it from personal property, this is referred to as a:
Levy
When would a Title Insurance Endorsement be used?
Most mortgage companies require Title Insurance Endorsements on a Lender's Title Insurance Policy to cover extended requests like an HOA in a condo complex, bare land, easements that are known etc.
What is the difference between an Escrow and an Impound account?
Once a buyer is ready to close on their loan they will set up an impound account. Normally it is set up by mortgage lender during the escrow. Account is to collect future property taxes and insurance. At the close of escrow, the impound account is transferred to the lender. Impound Account is basically an account set up and maintained by the mortgage company to collect insurance and tax payments on behalf of the owner.
During a closing, which party would pay for the escrow fees due to the statutes?
There are no statutes that state who would pay for escrow
What is the difference between a Seller Credit and a Seller Debit?
Seller's Debits is the money that the seller will pay to sell the property while. Seller's Credits is the money that the seller has coming back to them).
A seller would want to be able to prove that they have Marketable Title in order to show what?
The ability of the escrow company to provide a title insurance policy
Briefly, what is the difference between a Title Company and an Escrow Company?
Title Companies are the firms that provide a title search on a property and bring any title issues up while, the Escrow Companies are the firms that are the intermediary between all parties.
Which of the following would most likely not be considered a cloud in a property's title? Select one: a.IRS Liens b.A recorded personal easement in gross c.Title transfer from an LLC to an individual d.Missing ownership history
Title transfer from an LLC to an individual
What is the purpose of an Impound Account?
To collect upfront money used to pay buyers taxes and insurance
Regarding closing on a property, when does the transfer of ownership occur?
Transfer of ownership is actually when the deed passes from seller to buyer.
What are the two types of Title Insurance?
Two types of title insurance policies are 1. Owner's Title Insurance which protects the buyer of the property 2. Lenders Title Insurance policy which insures the lender against claims.
To further protect against large losses, a lessor might want to obtain what type of insurance policy that would cover them once their primary insurance is exhausted or runs out?
Umbrella Policy
When in Arizona does the ownership transfer to the new buyer?
When deed is delivered to the buyer
Different lenders may require different Title Policy Endorsements. In addition, sometimes builders or even communities may want or need a title endorsement. Which of the following would best describe what endorsements would commonly do? a.Ensure the seller will pay for any damages caused by fraud b.Be tailored to fit the specific needs of the seller or lender c.Designed to protect the lender in case of fraudulent sale d.Provide an endorsement of the properties condition
b.Be tailored to fit the specific needs of the seller or lender