Legal Aspects of Real Estate Ch. 12 Escrow and Closings

In a real estate transaction what party chooses the escrow holder?

Either party

What term describes the process in which a disinterested third party holds all money and documents relating to a transaction until all terms and conditions have been satisfied?

Escrow

What describes written authorization and instructions for how an escrow agent will perform in a transaction?

Escrow instructions

What is a contract of indemnity where an insurance company agrees to compensate the insured, either a homeowner or a lender, for financial losses that the insured has incurred because of defects to the title of the property?

A title insurance policy

What type of special title insurance policy is used when a property is being purchased through a land sales contract, purchase money mortgage, or purchase money trust deed?

A vendee policy

What describes expenses that the seller incurred but have not yet been billed for at the time of closing?

Accrued expenses

Which part of a Loan Disclosure indicates whether or not the lender will allow a loan assumption on a future sale or transfer?

Assumption

What refers to the succession of property owners of record dating back to the original grant of title from the state to a private party?

Chain of title

What settlement process refers to signing and transferring all documents and distributing funds?

Closing

A quiet title suit is also called a suit to remove

a cloud.

Items that are paid in advance such as property taxes are called

prepaid expenses.

Escrow doesn't officially close until the deed has been

recorded.

Within how many days is a creditor generally required to provide the Loan Estimate of the receipt of the consumer's loan application?

3 business days

The two methods that are typically used when closing agents and lenders calculate items that need to be prorated are the 12-month/360 day method and the

365 day method.

What refers to money that the buyer or seller needs to pay at closing?

A debit

What type of deed transfers title from the seller to the buyer?

A grant deed

When can licensees recommend specific individuals or companies to their clients and accept a referral fee?

Never

Which section of a Closing Disclosure shows the actual payments the borrower will make for principal and interest and mortgage insurance, an estimated amount for the escrow payment, and the total estimated monthly mortgage payment?

Projected payments

What is an extended title coverage policy that insures against many of the items excluded in the CLTA standard policy?

The American Land Title Association (ALTA)

What is the standard title policy in California?

The California Land Title Association (CLTA)

Who is RESPA administered by?

The Consumer Financial Protection Bureau (CFPB)

What was created in 1974 to ensure that a buyer and seller in a residential real estate transaction have knowledge of all settlement costs?

The Real Estate Settlement and Procedures Act (RESPA)

Who must sign and acknowledge escrow instructions?

The seller and buyer

Which section of a Closing Disclosure includes names and addresses for both the borrowers and sellers and the lender's name?

The transaction information

Interest is always paid

in arrears.