Session 11 Mult. Choice

A summary of the history of title is called the: A. abstract of title B. certificate of title C. chain of title D. title insurance

A. abstract of title

When is a preliminary title report or commitment for title insurance issued? A. before closing B. during closing C. after closing D. when the deed is recorded

A. before closing

In a business sale, the equipment would be conveyed using: A. bill of sale B. certificate of sale C. chattel security instrument D. UCC-1

A. bill of sale

If the buyer is assuming an existing loan on the property, which of the following is prorated at closing? A. interest only B. principal only C. mortgage principal D. both interest and principal

A. interest only

A standard title insurance policy includes coverage for: A. items of record which are not disclosed in the policy B. zoning ordinances C. persons in possession of the property D. errors a survey would show

A. items of record which are not disclosed in the policy

A policy of title insurance in favor of the mortgage insures the: A. lender B. seller and lender C. owner and lender D. owner

A. lender

An owner's title insurance policy will cover claims due to: A. misfiled documents B. unrecorded easements C. zoning violations D. future assessments

A. misfiled documents

An ALTA policy would be terminated under all of the following circumstances EXCEPT: A. sale of the property and assumption of the loan B. sale of the property with the buyer C. refinance of the property D. acceptance of a deed in lieu of foreclosure by the lender

A. sale of the property and assumption of the loan

An apartment has two units at $900 per month each and two units at $550 per month each. The rents are paid the first of the month in advance, and the close of escrow is June 10. How much will the buyer receive? A. $3,640 B. $2,030 C. $1,800 D. $1,700

B. $2,030

A commercial property is closing escrow on October 9 and the buyer is assuming the existing loan on the property. The tax proration for October would be: A. 8 days debit the buyer B. 8 days debit the seller C. 9 days credit the buyer D. 9 days credit the seller

B. 8 days debit the seller

The federal law that requires nonresident aliens to pay tax on gains from the sale of U.S. property is: A. RESPA B. FIRPTA C. TILA D. ECOA

B. FIRPTA

Which is most likely to reveal all of the owners in a property's history? A. certificate of title B. abstract of title C. title report D. affidavit of title

B. abstract of title

Which of the following would NOT be a debit to the seller at closing? A. IRS lien B. amount of buyer's new loan C. amount of the loan the buyer is assuming D. broker's commission

B. amount of buyer's new loan

If money is not withheld from seller's proceeds for property sold by a nonresident alien, who may be held liable for the tax? A. escrow B. buyer C. broker D. no one

B. buyer

How would a $20,000 seller carryback loan appear on a closing statement? A. debit to buyer and credit to seller B. credit to buyer and debit to seller C. only as a credit to buyer D. only as a debit to seller

B. credit to buyer and debit to seller

On a closing statement, the amount of the sales price would be: A. debit seller, credit buyer B. debit buyer, credit seller C. debit buyer only D. credit seller only

B. debit buyer, credit seller

You are closing an escrow at the end of the month on a four-plex. The rents are $500 per month per apartment. Each unit has a security deposit of $200 held with the landlord. Which of the following is true? A. credit the seller $800 B. debit the seller $800 C. debit buyer $800 D. credit the buyer $2,000

B. debit the seller $800

To prioritize a security agreement signed by a lessee or solar equipment, the lessor may: A. record a deed of trust with the county recorder B. file a UCC-1 financing statement with the Secretary of State C. have a title company conduct a UCC-1 search through the Secretary of State D. require the lessee to record the lease

B. file a UCC-1 financing statement with the Secretary of State

Upon review of a title report, an attorney finds gaps int eh chain of ownership. What should the owner do to correct these title defects? A. obtain title insurance B. file a quiet title action C. secure an affidavit of title D. obtain an affidavit of ownership from the county administration

B. file a quiet title action

On a closing statement a $5,000 earnest money deposit is shown as a credit to the buyer but is not shown on the seller's statement because: A. the earnest money will be refunded to the buyer B. it is included in the purchase price C. the seller will receive it only if the buyer backs out of the purchase D. it will be paid to the seller outside of escrow

B. it is included in the purchase price

A chain of title is a: A. measurement used by a surveyor B. listing of all recorded instruments affecting the title C. certificate of title D. list of the heirs of a deceased owner

B. listing of all recorded instruments affecting the title

Which of the following services does escrow handle as a part of closing? A. loans and liens B. prorations C. TRID Closing Disclosure D. inspections

B. prorations

If the subtotals on a seller's settlement statement show more debits than credits, this means: A. seller gets a refund B. seller has to pay money to close escrow C. buyer gets a refund D. buyer has to pay money to close escrow

B. seller has to pay money to close escrow

When a title insurance company pays a claim and then takes legal action against the party responsible for the claim, it is known as: A. subordination B. subrogation C. defeasance D. escheat

B. subrogation

Which form of title evidence is commonly used in Arizona? A. abstract and opinion B. title insurance C. chain of title D. certificate of title

B. title insurance

Schedule B on a title policy would NOT contain which of the following? A. liens B. types of conveying deed used C. exceptions D. CC&Rs

B. types of conveying deed used

Merchantable title is: A. insured title B. without cloud or defect C. without encumbrances D. a certificate of title

B. without cloud or defect

A property sells for $129,500. How much cash will the buyer need at settlement if the buyer will pay 20% down, a 2% origination fee for the mortgage, and $750 in closing costs? A. $27,972 B. $28,490 C. $28,722 D. $29,240

C. $28,722

What is the prorated rent on an apartment that rents for $600 per month and the tenant moves in on September 11? A. $180 B. $200 C. $400 D. $420

C. $400

Upon receipt of a preliminary title report, a licensee should: A. keep it in the transaction file for 5 years B. forward it to the client by email C. alert the client to any exceptions that would affect use or ownership rights D. compare it to the abstract of title

C. alert the client to any exceptions that would affect use or ownership rights

On a settlement sheet, what is usually true? A. seller is debited for pre-paid insurance B. seller is credited for interest to date C. buyer is credited for unpaid taxes D. buyer is credited for pre-paid insurance

C. buyer is credited for unpaid taxes

On a closing statement, the earnest money paid by the buyer would be which of the following? A. debit buyer, credit seller B. credit buyer, debit seller C. credit buyer only D. credit seller only

C. credit buyer only

When a rental property is sold, how are security deposits handled on the settlement statement? A. charge the seller and charge the buyer B. only as a credit to the seller C. credit the buyer and charge the seller D. only as a charge to the buyer

C. credit the buyer and charge the seller

A contract states that the taxes be prorated between the buyer and seller. The taxes have been paid in advance. The proper entry on the closing statement is: A. debit the seller and debit the buyer for the same amount B. credit the seller for taxes accrued before close and credit the buyer for the unused portion covering the period after close C. credit the seller and debit the buyer D. debit the seller and credit the buyer

C. credit the seller and debit the buyer

On a settlement sheet, rent paid in advance would be a: A. credit to the seller B. debit to the buyer C. credit to the buyer and a debit to the seller D. credit buyer only

C. credit to the buyer and a debit to the seller

You are closing on a property at the end of March where the seller has not paid for the second-half taxes of the previous year. Which of the following is true? A. debit seller 6 months taxes, credit buyer 6 months taxes B. debit seller 6 months taxes, credit buyer 9 months taxes C. debit seller for 9 months taxes, credit buyer 9 months taxes D. debit seller for 9 months taxes, credit buyer 3 months taxes

C. debit seller for 9 months taxes, credit buyer 9 months taxes

The lender will require a two-month reserve for insurance at closing. The insurance premium for a one-year policy has been paid outside of closing. The entry on the closing statement is: A. debit the seller B. credit the buyer C. debit the buyer D. there is no entry

C. debit the buyer

The interest prepaid on the closing statement with a new loan on the property by the buyer is: A. credit to the buyer B. credit to the seller C. debit to the buyer D. debit to the seller

C. debit to the buyer

A loan is paid off, but the lender never records the lien releases. The property would: A. be free and clear B. be subject to foreclosure C. have a cloud on the title D. require sheriff's action to remove the lien

C. have a cloud on the title

To obtain full disclosure concerning encumbrances, taxes and assessments, a buyer can: A. read the listing agreement B. read the purchase contract C. order a title insurance policy D. rely on the seller

C. order a title insurance policy

If solar equipment is leased, to secure their interest with a lien, the lessor will require the property owner to execute: A. deed of trust B. mortgage C. security agreement D. estoppel agreement

C. security agreement

The amount of cash that a buyer must bring to closing will appear on the settlement statement: A. the total of charges to the buyer B. the seller's credits minus the seller's charges C. the buyer's charges minus the buyer's credits D. the purchase price minus the earnest money

C. the buyer's charges minus the buyer's credits

A preliminary title report would disclose all of the following EXCEPT: A. tax liens B. easements C. zoning D. judgments requiring resolution

C. zoning

Who signs the settlement statement at closing? A. buyer B. seller C. settlement agent D. buyer and seller

D. buyer and seller

What does an escrow company do? A. process loan forms B. authorize commission payments C. offer title insurance D. calculate prorations

D. calculate prorations

If a buyer is financing the purchase with a new $100,000 loan, how would the loan appear on the closing statement? A. credit the seller B. debit to the seller C. debit to the buyer D. credit to the buyer

D. credit to the buyer

Which of the following items is covered by a standard owner's policy of title insurance? A. encroachments B. survey errors C. person in possession D. forgeries

D. forgeries

In a standard owner's title insurance policy, the page of exceptions indicates the: A. legal description B. type of interest being insured C. method of ownership for the buyers D. liens and encumbrances of record

D. liens and encumbrances of record

In a real estate closing, what would the buyer normally pay for? A. deed preparation B. real estate commission C. release of old liens D. recording of new loan

D. recording of new loan

Which statement is MOST correct regarding costs at settlement? A. the buyer is credited with the interest paid in advance on a new loan B. the seller is charged for the prepaid insurance premium C. the seller is charged for impounds D. the seller is credited for insurance the seller has prepaid

D. the seller is credited for insurance the seller has prepaid

In most real estate sales transactions, the seller evidences good title through a(n): A. title affidavit B. affidavit of value C. attorney's certificate of title D. title insurance policy

D. title insurance policy