Section 20: Recordation and Title Insurance in Georgia

We know how often title insurance is paid, but how much does it cost?

$2 - $3 per $1,000 of insurance purchased

In Georgia, how many years do we have to go back to trace the chain perfectly, with no gaps in ownership?

50 years

To make creating abstracts easier and more accurate and maybe help prevent dust mite overexposure, several states have enacted marketable title legislation, which automatically quiets any title claim after a certain amount of time. How much time is this?

50 years

Which option best describes marketable title?

A title to property that's free and clear of liens and only subject to loan payoff and any taxes owed

Notice that's been expressly given directly to a party

Actual notice

What's a quiet title action?

An action to locate and notify all who may have some claim on the title, and determine the validity of all claims

If there's a question about whether a person is an heir who should have received property, the best way to find that be in a ____________.

Birth certificate

Which of the following documents is used to create the title commitment?

Certificate of title

A statement of opinion on the status of a title to real property

Certificate of title. Used to create a title commitment

Establishes the title history or the path and proof of property ownership through a public records search for successive conveyances of title and encumbrances; each owner is considered to be a "link" in the chain

Chain of title

The protection that recordation affords the owner of a title is based on the theory of ___________ notice.

Constructive

Notice given to the world by recorded documents, whether or not the party has personally examined them

Constructive notice

We know the title company searches public records for information. Which three of the following does it verify?

Divorce, secured transactions, judgements

What are the five most common title issues mentioned in this video?

Errors in public records Missing heirs Forgeries Unknown liens Survey or boundary issues

Which of the following describes what proof of ownership is, within the real estate transaction?

Evidence that the title is marketable

Protects the lender or buyer from a greater range of defects

Extended coverage policy

What are the two most common ways to mitigate the effects of title issues?

Initiate an action to quiet title. Purchase title insurance.

Notice a reasonable person could obtain by making inquiries

Inquiry notice

when a property has known defects (such as easements), but the title company has notified the parties of the defect and has agreed to insure against it.

Insurable Title

Four things must happen for a title to be considered marketable. What are they?

It doesn't contain questionable validity. It doesn't expose the buyer to possible future litigation. It should allow the purchaser to sell or mortgage the property again in the future. It doesn't contain any serious defects.

what IS the point of chain of title?

It protects the buyer by ensuring that all people who have claimed to own the property actually owned it.

The claims for loss statement is a pretty important part of the title policy. What is its purpose?

It states how the company will handle any claims that arise after purchase.

What three other things will a title search verify?

Legal property description Ownership Encumbrances

The following qualities are attributes of a _________ insurance policy. not an owners: Only offers protection up to the amount remaining on the mortgage loan Doesn't make exceptions for ownership claims that could be refuted or confirmed through a visual inspection of the property Is assignable to future loan holders (for example, if the loan is sold to another lender in a loan package on the secondary mortgage market)

Lenders

_____________ (MERS) is a computerized registration system of tracking that records all of the beneficial interests connected to a mortgage.

Mortgage Electronic Registration System

How often is the policy owner required to pay for title insurance?

Once

We know that the title commitment is a title insurance company's promise to issue an insurance policy on a property, but when will this issuance happen?

Once the final settlement on the property has occurred and conditions named in the binder have been satisfied.

At what point in the sales transaction process does the title insurance company issue the title insurance policy?

Once the requirements have been satisfied, and the seller has delivered the deed to the buyer

Discusses the property, encumbrances, and what's covered by insurance

Preliminary report

Which document is used to give a buyer an overview of the title history and information about what is or isn't covered in an insurance policy?

Preliminary report

A court action to remove a cloud on a title. Filing a suit

Quiet title. Civil lawsuit to recover damages

Often these deeds will be used when transferring property ownership between family members (e.g., Grandma gives Joey her house during her lifetime), or as part of a settlement in the event of a divorce. used to cure mistakes in a recorded title, such as a missing signature, misspelling of a name, or a failure to record a real estate document. grantor isn't guaranteeing that the title is free of defects, just that the grantor releases ownership interest.

Quit Claims deed

As a licensee, you're helping a couple buy a new home. The title company discovers a cloud on the home's title. Which one of these is your best course of action?

Recommend the couple find another property or get the seller to quiet title.

What are the sections of title commitment?

Schedule A: list basic details Schedule B-I: breaks down steps to meet requirements Schedule B-II: exceptions/exclusions

Title insurance that protects the buyer from basic title defects

Standard coverage policy

Gives the title company permission to pursue the party who caused a title insurance loss or claim payout

Subrogation

If there's more than one recorded deed on a specific property, which one takes priority?

The deed that was recorded first

When a title company conducts a search for title issues, it searches public records. As part of its search, the title insurance company may verify the following information:

The legal description of the property Ownership Encumbrances Judgements Divorce Secured transactions

What is chain of title?

The sequence of historical transfers of title to a property

The appraiser of Garran's property used the Torrens system to perform a title search. Now a claim has been filed. Who or which entity will be the title guarantor?

The state

What three things happen after a claim is submitted on a title policy?

The title company reserves the right to collect payment from whoever caused the loss. The amount of a loss the insurance company pays is deducted from the coverage amount. The title insurance company will either pay the debt or challenge the claimant in court.

What's a title commitment?

The title insurance company's promise to issue a title insurance policy to the buyer

Which three of these statements about title insurance are correct?

Title insurance protects the lender from loss due to defective title. Title insurance protects the buyer against loss resulting from previously unreported title defects. Title insurance provides assurance that the property owner has marketable title.

What is the purpose of acknowledgment?

To ensure signing parties are who they say they are.

Why would a mortgage lender have a title policy?

To protect its investment on a loan it has extended on a property

An optional alternative title search, used in only a handful of states, that only goes back to the previous title search, assuming that the last search was done appropriately

Torrens system. The Torrens system assumes the last search performed was done accurately and legally. A Torrens search only goes back to the last time a title search was performed on the property. A Torrens certificate is issued and lists the state as the title guarantor.

True or false: Without recording, there's no way to guarantee that a person who holds a deed is actually the person who owns a property.

True

True or false: Witnesses do not have to be official

True

True or false: be recorded, a deed must be acknowledged.

True

True or false: deed, mortgage, or other instrument affecting real estate is not valid if not recorded.

True

True or false: is the signer who does the acknowledging, not the notary. The notary takes the acknowledgement.

True

True or false: to regain the title sequence and repair the link (so to speak), in the event of a break in the chain, the search must go beyond the recorder's office to probate (in the case of a death) or civil courts (in the case of foreclosure).

True

True or false: With MERS, the original loan is recorded, but if the original loan is transferred to another MERS member, it doesn't need to be recorded. True or false: MERS system was coordinated by major lenders that sell mortgages to each other on the secondary market.

True; True

Which of these is an example of unrecorded interest?

When a property right is too unsubstantial to need to be recorded.

When does title legally change hands?

With the transfer of the deed from the seller to the buyer. (Recordation is only for public notice. It doesn't transfer title)

Are the following statements regarding notary public true: A notary's stamp serves as the official acknowledgement requirement. A notary's seal serves as the official acknowledgement requirement. An example of common language is: "Before me appeared Robyn Banks, known to me to be the person whose name is subscribed ... "

Yes

The __________ is the document showing the chain of title for a property.

abstract of title

Typically, a document must be _________ before it's recorded. This means that a third party signs the document, affirming that the parties named in the document were the ones who signed, and that they did so of their own free will. In some states, ____________ are able to fulfill this obligation by simply signing the document themselves.

acknowledged; witnesses

__________ notice is notice given directly to, and received by, a person.

actual

Property recordation and possession protect the owner's title against all claims of interest not recorded in any public record. This type of protection relies on the theory of ___________ notice: The world is bound by existing knowledge of the title conveyance when the conveyance is publicly recorded and the owner takes possession.

constructive

Proof of property ownership, usually a deed

evidence of title

___________ notice is the idea that if someone were to perform a reasonable amount of research and inquiry, the information would be discovered.

inquiry

A __________ suit is a suit to shut down any potential opposition to the title.

quiet tile

A __________ quits someone from claiming interest in the property. Often these deeds will be used when transferring property ownership between family members

quit claim deed.

A deed that does not offer any warranties but simply releases the current owner's claims to the property. Releases the deed (Ex. divorce, foreclosure)

quitclaim deed (non-warranty deed)

An insurance contract insuring the policy owner against financial loss if the title to real estate is defective

title insurance. Title insurance protects against this type of previously missed, unreported, or undiscovered, adverse claim to the buyer's title.