Title Insurance Test

Issuing Title Insurance

1. Based on title examination (abstract/summary). Sometimes assures the accuracy and sufficiency of the survey or site inspection. 2. The intent is to protect owners/lenders/leaseholders

Owner's Title Policy

1. Insure estate of ownership, occupancy, possession. 2. Liability of insurer remains constant over life of policy. 3. Never expires. (enhanced increases) 4. Protects buyer's interest 5. Covers property line disputes.

FHA (Federal Housing Administration)

1. Insured through the FHA; insurance protects the lender, should the borrower default. 2. Does not insure second mortgage. 3. Buyer must occupy the home. 4. May waive prepayment penalties 5. Some allow for payment increase over time 6

Condemnation Process

1. Used in eminent domain 2. Gov't agency applies to court for public purpose. 3. Court approves or denies. 4. If owner does not agree with compensation - can ask court to get involved and can present evidence).

Agent

Has the authority to act on behalf of insurance company.

Virginia Title Commissioner of Insurance Disciplinary Actions

The commission can prohibit, suspend, revoke, or refuse renewal of any person licensed for any of the following causes: 1. Materially incorrect/misleading, misleading, incomplete statements for license application. 2. Violating any insurance laws or regulations, subpoenas or order of the commission or state reg. authority. 3. Obtaining/attempting to get license through fraud. 4. Rebating. 5. Engaging in twisting (defined as inducing an insured to terminate an existing policy and purchasing a new policy via misrepresentation.) 6. Improper handling of $ 7. Intentional misrep of terms of an actual or proposed contract or application. 8. Unfair trade practice or fraud 9. Coercive or dishonest practice (or incompetence to this level). 10. Financial irresponsibility related to the applicant, policyholder, agency etc. 10. Having an insurance producer license suspended in another state. 11. Forgery on application. 12. Cheating on the exam. 13. Knowingly accepting insurance business from unlicensed. 14. Failure to comply with child support order. 15. Failure to pay state taxes.

Credit Report

Used by lenders to determine if individual is a good credit risk and potential interest rate to be charged. May also look if a lot of debt or potential moral hazard.

Judicial Foreclosure

Used for conventional, VA-guaranteed, and FHA insured mortgages. Time frame: -lender notifies title company or trust w/written notice (includes the deed, DOT, and statement of acct.) -Declaration of default recorded. -Notifies borrowers and any subsequent buyers and lender's that they are selling. -The borrower is given a specified time to pay the defaulted amount -Notice of sale is recorded (published in the local paper) at least 20 days then foreclose -Foreclosure takes pale -The trustee is paid, the lender is paid, jr. lienholder then borrower with title to the new owner.

Maps and Surveys

Used to get information on title.

ALTA 2006 Loan Policy

Used to insure title where insured's interest is through a mortgage or DOT

Bill of Sale

Used to transfer ownership of personal property

Title Examination - Chain of Title

Each recorded document can be verified; conveyances can be verified and account for

Lien Priority

Effective after judgement is filed, docketed and indexed. 1. Priority is based on timing (first in time = first in right). 2. Whether secured or unsecured. 3. Perfected - all legal requirements fullfilled to enfoce; notice. 4. Generally property tax liens have higher priority over other liens. (same with special assessments). *federal once filed have priority

Title Policy Endorsement - Manufactured Housing Units

Either loan/owner Land broadly defined to include manufactured housing unit located on property at time of policy

Officers of Corporation

Elected by Board (Pres, VP, Secretary, Treasure)

Adverse Possession

Elements: 1. Actual 2. Visible 3. Notorious 4. Exclusive 5. Hostile, and 6. Continuous for required period (tacking permitted)

Joint Tenancy

Equal ownership; undivided interest. Survivorship rights cease when one owner sells their interest.

Three Credit Bureaus

Equifax, Experian, TransUnion

Title Assurance (SEC)

Established that following three aspects of title are valid: 1. Conducting surveys 2. Examining records, documents, etc. 3. Engaging a lawyer or legal action to clear title of claims against it. Surveys, examine records, claims cleared

ALTA Owner's Policy Conditions Definitions - Estate

Estate or interest described in schedule A

Fixtures

Personal property permanently affixed to the land and intended to form a part of the land.

Types of Easements

(1) Easements Appurtenant; and (2) Easements in Gross

Affiliated Business Arrangement

**only thing of value that can be received is is a return of ownership interest and cost of service rendered. -return on investment forbids payments that are based on the business referred but allows for return on the ownership interest or a return on the controlling business investment.

ALTA 2006 Loan Policy - Conditions

*Very similiar to owner's policy. Differences: 1. Insured defined broader to include owner of indeptedness and successor (including trustee/fiduciary). 2. Also includes gov't agency or instrumantality that is an insurrer/guarantor (i.e. FHA). Extent of Liability: 1. Policy will not exceed lesser of: a. insurance b. amount of indebtedness c. difference between value of the title as insured and the value to the title subject to risk insured by policy, that amount paid in title acquisition. * add 10% for litigation

Contents EXCLUDED FROM Consumer Reports

1. Bankruptcies over 10 years 2. Civil suits/judgements over 7 years 3. Paid tax liens over 7 years 4. Collection accounts written off after 7 years 5. Other adverse items (except criminal convictions) over 7 years old.

Title Policy Endorsement Construction Loan - Loss of Priority

- used where mechanic's lien may take priority.

ALTA Short Form Residential Loan Form

-covers residential property title risks with same coverage by incorporating it by reference. Two versions: 1. Certain endorsements are automatically incorporated into the short form loan policy coverage. 2. Other form - endorsements are made by check-the-box incorporation.

Insurable Risk Requirements

-large number of similar exposures so losses predictable. -loss must be accidental and unintentional -loss must be determinable/measurable -loss should NOT be catastrophic -chance of loss must be calculable -premium must be economically feasible

Real Estate Settlement Agent Duties

1 Causes recording of the Deed, DOT and other documents. 2. Causes disbursements w/in 2 days. 3. May not disburse loan funds or other funds prior to recordation of instruments EXCEPT: a. Funds received that are overpayments to be returned to the provider of the funds. b. Funds necessary to effect recording of instruments; or c. Funds that the provider has by seperate written instrument directed to be disbursed prior to recording the instrument. 4. Provides notification to the purchaser of the availability of owner's title insurance.

ALTA Owner's Policy Notice of Claim Clause

1 Must be given by the insured claimant 2. Insured must notify - in writing - promptly if: a. Litigation as set forth in defense of conditions b. Knowledge of insured, about the claim of title or interest, which may cause loss. c. If title/interest is rejected as unmarketable. *requires proof of loss (to be determined with certainty. Must also include the basis of calculating the amount of loss or damage.

Duties to the Insurer

1. Accurately disclose product features. 2. Write business that falls w/in the insurer's underwriting guidelines. Appropriately handle premiums 3. Maintain required records. 4. Transact in legal and ethical manner.

Two Requirements for Transfer of Deed

1. Acknowledgement 2. Signed

Special Risk to Title

1. Acknowledgements - grantor saying deed is genuine and voluntary in presence of notary. 2. Bankruptcies - if mortgagee goes bankrupt land passes to the lender but does not wipe our judgements. 3. Probate - tricky process 4. Good Faith - required 5. Lis pendes - ongoing litigation

Types of Fraud

1. Actual - act or statement intentionally made to deceive, misstating hiding material fact. 2. Constructive Fraud - arises from breach of duty/negligence or unintentional misrepresentation. Who can committ fraud in RE: buyer/seller/broker/appraiser

Virginia Title Commissioner of Insurance Changing Agents and commissions

1. Agents MUST accept and honor requests by a policy holder for a change of insurance agent of record (must be in writing). a. Effective on date of the next renewal of the policy. 1. Prior to effective date, insurer provides written notice of change. 2. New agent paid commission on policy effective prior to the next renewal date of the policy following the requested change: -excluding any commissions/comp payable under an insurer's retirement or deferred comp plan with insurance agent.

Characteristics of a General Partnership

1. All partners have unlimited liability (each party's assets at risk to meet other partners). 2. Each partner can enter into agreements on behalf of partnership w/o other's consent. 3. Partnership dissolves on death 4. Partnership dissolved by one person bankruptcy.

VA Loans Allowable Charges

1. Appraisal 2. Credit 3. Recording fee 4. Prepaid items 5. Hazard insurance 6. Flood zone determination. 7. Survey 8. Title Exam and insurance 9. Va funding fee (exempt if 10% min disability)

FHA Loan Allowable Fees

1. Appraisals and inspections 2. Credit report 3. Lender origination fee 4. Deposit verification 5. Home Inspection (up to the specified limit) 6. Cost of title exam and title insurance 7. Documents prepartion 8. Property survey 9. Attorney's fees 10. Recording fees, transfer stamps and taxes. 11. Testa and certification fees, water tests, etc.

RESPA Closing Disclosure Breakdown

1. CD required for consumers who have recession right under TILA. a. Page One. Loan terms, amount, interest rate, monthly P&I, prepayment or ballon payments, amoritization schedule, amounts deposited into escrow. b. Page Two. Includes details of all closing costs, loan costs, and other costs paid by borrowr/seller and other parties. c. Page Three. Provides need for cash to close (summarizes costs of borrower and sellers) d. Page 4. Disclosures about the loan term. e. Page 5. Loan calculations (important consumer oriented disclosures). *if new CD discrepency must provide 3 days before if following affected: a. APR b. loan product c. added prepayment to terms. *satisfies RESPA for loan transactions.

Contents of Title Exam Summary:

1. Chain of Ownership 2. Recorded easements 3. Recorded mortgages 4. Wills 5 Tax Liens 6. Judgments 7. Pending lawsuits 8. Marriages (things that affect title) 9. Legal owners name (in public records) 10. Current taxes due. 11. Date of most recent tax assessment 12. Property's legal description 13. Conditions to issue insurance 14. Drawing/picture of property as found in plat or legal description

Schedule A of a title commitment

1. Commitment Date 2. Policies to be issued, amounts and proposed insureds. 3. Interest in land and owner (notes % ownership) 4. Description of the land (some states use this as Schedule C). a. Should match deed b. May use survey c. Metes and bounds usually used. *tax map description generally not acceptable *if record description includes exceptions or reservations, they must be included in the land description or listed as an exception in Schedule B or both.

Contents INCLUDED IN Consumer Reports

1. Credit information 2. Employment information. 3. Current/past address 4. Information on other persons who have requested a consumer report (to include the requestor's name/trade name and reason).

How is Title Shown?

1. Deed 2. Transfer of property by will 3. Court order 4. Law

Acquisitions and Transfers of Real Property

1. Deed conveys property 2. Encumbrances 3. Eminent Domain 4. Wills and Inheritance 5. Trusts after Death of Property Owner 6. Accession 7. Alluvion 8. Alienation 9. Adverse Possession 10. Abandonment 11. Decedent's Estate 12. Trusts

Types of Problems Found During Title Examination

1. Defects in Title (forgery, errors, unenforceable, false marital status) 2. Encroachments - infringement or overhang (found via survey). 3. Improper Execution of legal documents related to property (wrong jurisdiction/law not followed) 4. Unknown heirs 5. Contingent remainder - interest in title that becomes effective on condition (someones death). 6. Voluntary and Involuntary Liens

Duties of Agent to Applicant/Insured

1. Disclosing product features, benefits, premiums and provisions to the applicant/insured. 2. Properly handled any premium collected. 3. Not to commingle premiums with own funds. 4. Assist with customer service issues in a timely manner. 5. Handling claims - deal with according to insurance company standards and state regulations.

When are Referrals Under an ABA allowed?

1. Disclosure is made: a. Must be given before or at time of referral. b. Must describe arrangement. c. Cannot REQUIRE the consumer to use them.

Virginia Title Commissioner Of Insurance Licensing paperwork

1. Each applicant must submit application w/ fee -fee must range from $15-$30 2. Must seek license within 183 days of exam -if fail exam requirements, must satisfy all of them, including the exam, before applying again.

Reasons for Consumer Reports

1. Employment 2. Underwriting insurance 3. Eligibility for gov license or benefits where financial responsibility or status must be reviewed. 4. Investors/Insurers looking at credit risk.

ALTA 2006 Loan Policy Coverage

1. Essentially the same as the owner's policy. 2. Covers risk of not being a priority due to: a. Advance proceeds b. Prioritization of street improvement assessments liens existing at the time of the policy. c. Prior fraudulent transfer/preferential transfer under bankruptcy. *covers the risk that the mortgage lien will be found invalid or unenforceable due to an invalid assignment if the assignment is in Schedule A b/c assignment was not free and clear.

Stemming from Indemnity:

1. Exact loss must be determined with documentation. 2. Insurer must be able to anticipate extent of loss for premiums. 3. Insured must have an interest in the title sufficient that they are at risk for financial loss. 4. Actual financial loss must occur.

Types of Authority in Agency Law

1. Express - specifically given. 2. Implied - authority given to the agent to perform its express authority. 3. Apparent - authority a reasonable person believes the agent has.

Virginia Title Commissioner Of Insurance CE Failure to Meet

1. Failure to meet deadline and you are in noncompliance results in termination of each license held by agent for area not in comliance. Failure to meet requirements components: 1. Obtain course 2. Furnish proof of evidence/exemption. 3. Obtaining waiver of requirements.

Insurance is Governed by Federal Regulation

1. Fair Credit Reporting Act 2. Federal Fair and Accurate Credit Transaction Act (FACT)

Types of Liens

1. Federal Liens - arise from debt due to federal income, estate and gift tax debts. a. notice of lien must be filed for federal tax debts to gain priority. b. Federal tax lien takes priority over most other claims. c. Federal tax liens attach to all property and rights to it. (Stae determines what it attaches to). 2. Judgment - arise out of the civil case (sheriff can sell the property by writ). Lien placed on the property in that jurisdiction. 3. Mechanics liens - do not have to be recorded and have higher lien priority.

Interests in Property

1. Fee Simple 2. Estate 3. Life Estate 4. Leasehold Interest 5. Lease

Types of Deeds:

1. General Warranty Deed 2. Special Warranty Deed - some warranties but not all (use with foreclosure) 3.Bargain and Sale Deed -does not include warranties. 4. Quitclaim Deed - transfer whatever interest you have 5. Confirmatory Deed - used to correct errors in deed.

Summary of SA REquirements

1. Have $250K minimum of E&O insurance. 2. Have a fidelity bond of $100k 3. Provide an annual audit report of its escrow accounts to the state. 4. Keep all settlement records for at least five years after the settlement is complete. 4. Be registered with the state bar. *if agent is guilty of mishandling a transaction the penalty can be up to $5k and license can be revoked.

When Seller is Guilty of Fraud

1. Hidden defect limits buyers use 2. Sell has confidential relationship with buyer. 3. Buyer gave answer which is now false.

Land Trust (aka title holding trust)

1. Holds property w/o persons name in public record. 2. Pass to heirs w/o will. 3. Property held in trust (revocable, living trust)

ALTA 2006 Loan Policy Contents

1. Insuring agreement/covered risks 2. Exclusions - similar to owners but apply the protection of the insured mortgage and extend to recording date of mortgage (not deed). 3. Schedule A - Name, estate interest encumbered by mortgage, vested title holder, insured mortgage and assignments, legal descripition/amendments 4. Schedule B - exceptions 5. Conditions 6. Optional Schedule C

Types of Trust Agreements:

1. Land Trust (aka title holding trusts) 2. Personal Property Trusts

Elements to a Title Policy Application

1. Legal description of land 2. Owner/seller name, address, phone 3. Listing agent name/number 4. Purchaser's name/address, phone 5. Seller's Agent and phone 6. Sales price 7. Lender, loan amount, preparer's name/phone 8. Insurance agent's name/phone 9. Requirements (inspections) 10. Purchaser or lender's attorney/phone 11. Seller's attorney name, address, phone 12. Anticipated closing date.

Progression of Insurance

1. Liability was limited to loss/damage from fact. 2. Shifted to contracts of indemnity (promises to compensate the person for financial loss under specific circumstances. 3. Insurance contracts - require premiums as consideration. (insurer not reimbursed for what paid)

Virginia Title Commissioner Of Insurance Licensees Exempt from CE Requirements

1. License issued with first 12 months of biennium. 2. Age 65 license (by end of biennium) can ask for exemption if: a. Agent has been licensed at least 20 years. b. RA who will have held VA resident license continously for proceeding 4 years by end of biennium and the balance of 20 years in another state having held equivilant license authority in VA for at least 20 of the proceeding 30 years. *any unlicensed period was not the result of a license revocation or termination by the Commission.

Defects in title (i.e irregular or faulty)

1. Liens 2. Easements 3. Incomplete description of RE in public records. *defects impede the ability of the title holder to transfer interest in property.

Characteristics of Limited Partnership

1. Limited partners liability limited to what they contribute to the partnership. 2. Limited liability is cut off by active participation in control of partnership. 3. Cannot use limited partners name in partnership name.

Other Escrows

1. Long Term Escrows - used with land installment contract. (Title not transferred; deed can be executed and placed in escrow, held until buyer finishes paying for the land. 2. Mortgage Escrow - depositing of money for real estate purchase in escrow when title is examined. -once determined no liens, the money is released to mortgagor. 3. Lease-option escrow - lease with option to purchase; lessor promises a portion of lease will be put toward purchase if lessee exercises the purchase option.

ALTA Owner's Policy - Exclusions from Coverage

1. Loss or damage due to laws/ordinance 2. Rights of eminent domain (unless recorded) 3. Defects know to the insured or agreed to 4. Claims by reason of bankruptcy 5. Fraudulent transfer 6. RE tax or assessments imposed by gov't bodies 7. Violations of ordinances or laws 8. Laws or regulations relating to the occupancy, use or enjoyment, character/dimension, location of improvements, subdivision, EPA, or the effect of any violation of law.

Hx of Title Insurance

1. MA first colony to enact law related to titel 2. Early warrants 3. Seller swears an oath (start of warranty deed where seller warranted things in writing.)

Types of Restrictions, Limitations and Conditions to Title Insurance

1. Mechanic's lien and Materialmen's lien 2. Cemeteries 3. Minerals 4. Violation of law/ordinances 5. Governmental Regulations Exclusions 6. Eminent Domain 7. Easement

Methods to Create Legal Description:

1. Metes and bounds 2. Referencing other documents 3. Public Land Surveys 4. Plat method 5. Lots and Block

Virginia Title Commissioner of Insurance Payment and Sharing of Commissions

1. Must be duly appointed agent at time of transaction, held a valid license as an agent for class of insurance involved. 2. Agents cannot directly/indirectly share commissions or compensatin paid on account of a tranaction under his license w/ non-licensed person. -if commission shared must be with agent that is licensed and qualified for same class of insurance.

ALTA 2006 Loan Policy Schedule A

1. Name 2. Estate of interest encumbered by the mortgage 3. Vested title holder 4. Insured mortgage and assignment 5. Legal Description 6. Amendments to coverage 7. Policy information

ALTA Owner's Policy Schedule A contents

1. Name of Insured 2. Estate Covered 3. Whom title is vested with (including deed reference) 4. Legal Description (if not in schedule C) 5. Policy number, amount of insurance, date of policy, and file or reference number.

Elements of Land Trust Agreement (must purchase with cash or purchase with loan and then transfer to trust)

1. Name of trustee 2. Lists of the rights of the trust's beneficaries. (Beneficiaries enjoy all normal rights/obligations). 3. Land trust changes the owner's interest from RE to personal properety (thus can transfer w/o deed). 4. Land in trust can be pledged for security w/o having to use mortage/insurance/note.

Elements of a Legal Contract

1. Offer and acceptance (completion of application and agent or insurer accepts when policy is issued) One exception with property casualty insurance can bind immediatley. 2. Consideration - premium paid by insurer/insured's agreement to comply with contract in exchange for premiums. 3. Competent parties - over 18 sound mind not intoxicated. 4. Legal Purpose - enforceable legal purpose and comply with laws.

Unilateral Contracts (insurance contracts are)

1. Only one party makes a promise enforceable by law. 2. Insured must make payment but do not have to.

Types of Title Insurance Policies

1. Owner's Policy 2. Loan/Lender's Policy 3. Leaseholders Coverage 4. Construction Loan Policies 5. Life Estate

Virginia Title Commissioner Of Insurance Insurer Appointment Fees

1. Prior to August 10th (or first business day thereafter, every insurer must: a. Remit to the Commission a renewal appointment fee (for each) who has not been terminated by insurer by June 30th. 2. Failure to pay = $50 penalty each day until full payment is received. 3. May terminate appointment of each agent whose renewal fee was not received and after insurer was given notice and opportunity to submit payment.

Rectangular Government Survey:

1. Public Land Survey System (PLSS) a. Point chosen by astronomical observation. b. Baseline runs through the point and goes E to W with N and S line (called principal meridian) 2. 32 baselines and 35 meridians (24 miles apart) States in the PLSS: all west of Mississippi and five states of NW and most of AL, FL, and MS.

Legal Interpretations Affecting Insurance Contracts

1. Reasonable Expectations (reasonable lay person). 2. Utmost Faith - in completing application and paying claims. Insurer cannot coerece into taking lower payment. 3. Fraud - by insurer voids contract. 4. Statute of Frauds with RE contract - must be in writing. RE over one year interest must be in writing. 5. Waiver and Estoppel if insurer waives right cannot later claim and is estopped from denying a fact confirmed by his behavior.

Method for Clearing Title

1. Releases 2. Quitclaim deed (can release lien or claim). Conveys only what the owner has.) Used with divorcing spouses. 3. Assignments - real estate contract to a third party. 4. Subordinations 5. Affidavits

Important Legal Doctrines with Good Faith:

1. Representations: a. Misrepresentation - intentional or negligent false misrepresentation by words/actions with the purpose of deceiving, defrauding or causing others to detrimentally rely upon. (I) Misrepresentation of material fact voids policy if insurance would not have been issued. (ii) Honest misrepresentation - the affected party can rescind. b. Warranties - a statement made by an insured that must be true in order for the insurer to be obligated under the contract. -court interpretations - immaterial breaches of warranty cannot be used to remove the insurer's liability under its policies. -information or application are considered representations and misrepresentations do not limit liability unless material. c. Concealment - purposefully not revealing a material fact to the insurer. (can be fraud/misrepresentation). (Silence not usually considered concealment). d. Fraud - voids contract

Zoning Types

1. Residential 2. Commercial/Investment - incoming producing (includes vacant lots zoned for commercial) 3. Industrial 4. Agricultural 5. Recreational 6. Special Purposes 7. Public Property

Types of Trusts

1. Revocable 2. Irrevocable 3. Intervivos/living 4. Testamentary - created by terms of will; in effect once grantor passes 5.Charitable

ALTA 2006 Loan Policy Exclusions

1. Same as owners policy 2. Similiar exclusions but apply to the protection of the insured mortgage and extend to the recording date of the mortgage rather than the recording of the deed. 3. The unenforceability of the insured mortgage due to a failure of compliance with applicable business law. 4. Invalidity and unenforceability due to usury.

Forms of Ownership

1. Sole Ownership. 2. Joint Tennancy 3. Tenants in Common 4. Tenants in the Entirety 5. Community Property

American Land Title Association

1. Tried to standardize forms across US 2. Insurers use forms as the basis for many of their title policies.

Structure of Personal Property Trust

1. Trustee (normally corp.) 2. Holder of mortgage is the beneficary. 3. Terms of the trust direct how the debt securities and other instrumentes in the trust are to be transferred upon death of beneficiary. 4. Ideal for those w/several mortgages, leases, notes, etc.

Requirements for RESPA

1. Uniform settlement statement (credits/debits) 2. Closing Disclosure 3. Affiliated Business Arrangements 4. Initial Annual Escrow Statements 5. Other documents 6. Closing Escrow

Exclusions and Exceptions in Title Coverage

1. Uninsurable Risks 2. Riparian rights 3. Restrictions, Limitations and Conditions

Deed of Trust

1. Used as mortgage instrument. 2. Realty conveyed to 3rd person (trustee) who holds the property as security for payment of debt to the lender who holds the note. 3. Cancelled when debt is paid. The DoT gives the power of sale to the trustee if default.

Virginia Title Commissioner Of Insurance Appointment Termination

1. Valid appointment - the agent can act for an insurer during the time the appointing insurer is licensed to do business in Virginia. -no later than 10 calendar days after notice of termination of an appointment has been sent to agent/agency, the agent/agency must immediately stop selling/soliciting on behalf of the insurer. *agent must notify the agent w/in 5 calendar days. **must notify the Commission of appointment termination w/in 30 calendar days.

Types of Liens

1. Voluntary - owner places on land 2. Involuntary - created by law to protect other parties interest in monetary claim against the owner

Probate Steps

1. Will filed 2. Validity Proven 3. Property Identified and inventoried 4. Appraised 5. Notice of Death made public/debts paid 6. Heirs identified/located 7. Taxes paid 8. Reainder is distributed per will or intestacy *must occur before property can be transferred.

Minimum Requirements for RE Contract to be Enforceable

1. Written 2. Sale of RE (including lease for one year or more) must be in writing. If not VOIDABLE by both parties. Must include: 1. Identify parties (names or initials) 2. Describe the subject matter 3. Set forth the material terms of the agreement and its conditions. 4. Signed by the party to be charged.

Elements of Deed

1. name of parties (first and last) 2. property description 3. consideration 4. acknowledgement (grantor says genuine, executed voluntarily, in front of Notary, required prior to recording). 5. signed 6. recorded 7. effective upon delivery 8. deed attestation

ALTA Title Commitment Schedule B - Section 1 Requirements

1. pay agreed amounts for interest and mortgage to be insured. 2. Pay insurer premiums and fees. 3. Have all documents signed, delivered, and recorded 4. Notify company if the insured adds another interest to the land 5. ADDITIONAL requirements which are not part of the standard form.

Residential Property

1.. Single Family Homes 2. Smaller multi-family units 3. Trailers 4. Cooperatives 5. Condos (multi-unit property and 4 walls) 6. Vacant lots and land suitable for construction

Title Policy Endorsement 9- Restrictions/Encroachments/Minerals Loan Policy

9.1-06 Conventants, Conditions and Restrictions Unimproved Land - Owner's policy - ensures against violations of covenants related to EPA. *Review pink tabs as to specifics.

Encumbrances are

A claim, lien, charge or liability that is attached to and binding on real property (but does not keep the owner from transferring the title as long as claims are satisfied).

Title Committment

A committment is a contract that states that if the conditions are satisfied in the committment, the title policy will be issued. *usually issued before the conditions found in the title search are satisfied. Final policy usually issued at closing.

Morale Hazard

A condition or attitude of carelessness or indifference that increases the frequency or severity of loss.

Contracts of Adhesion (Insurance Contracts are)

A contract whose terms are drawn up by one party and the other party adheres to them. Ambiguities will be ruled in favor of insured

Judicial Sale

A decree of a court directing the sale of mortgaged property. State governed and proceeds pay off debt.

Adverse Selection

A high-risk person benefits more from insurance, so is more likely to purchase it.

Trust

A legal relationship under which title to property is transferred to a person, called a trustee, who has control over the property, and must manage it for some other person -- called a beneficiary. -deed rules over will -document governs holding and distribution

Metes and Bounds

A method of land description which involves identifying distances and directions and makes use of both the physical boundaries and measurements of the land. Specifies the property's shape and direction. metes = measurements bounds = monuments mark the property

Plat Method

A method of legal description that describes real property by making reference to its location on a plat map recorded in the land records in the county in which the property is located. 1. Often used in cities 2. Lots aligned and numbered in sequence (then platted and sold by designated numbers (ie lot and block). 3. Most states require developer to survey and have plat made. 4. Plats include the proposed street blocks and lots. Blocks are divided by roads (include easements and rights of way). Recorded in county clerk's office/land records, or public recorder.

All Inclusive Trust Deed

A purchase money deed of trust subordinate to but still including the original loan. -used when seller makes a loan to buyer and seller had an existing first trust deed on property. *usually recorded with grant deed which conveys full title to buyer. Foreclosure handled by trustee b/c title is conveyed, future liens against seller do not attach to the property.

Grantee

A person who receives a conveyance of real property from a grantor.

Construction Loan Title Policy

Includes conditions and stipulations applicable only to construction loans; such as providing for mechanic's liens based on the laws in the state of policy issue.

Exposure Unit

A unit of measurement used to determine pricing in insurance policies.

Virginia Title Commissioner Of Insurance Notice of Non-compliance.

A. Notice of status provide about six months before deadline. Includes status and notice of non-compliance results. (Sent via mail to last known address) -failure to receive does not allow you to contest

Title Policy Endorsement - Variable Rate Mortgage

AKA adjustable rate mortgage Used with loan policies where loss due to change in interest rate. This ensures priority of the lien. Change in rate of interest - means those changes in the rate of interest calculated pursuant to the formula provided in the insured mortgage at the Date of Policy. -no coverage with usary, credit, TILA issues

Virginia Title Commissioner of Insurance Protections from Civil Liability

Absent actual malace, insurer, authorized rep., Commission, NAIC, state/federal authorities are immune from civil liability when acting in representative capacity. Actual malice = proof that person knowingly made a false statement in process that requires truth. knowledge - intent - purposful - false = actual malice.

Fair Credit Reporting ACT

Act that protects the privacy of background information and ensures that the information supplied is accurate. Under act credit report = consumer report

Virginia Title Commissioner Of Insurance Acting as an Agent

Acting as an agent is defined to as: 1. Selling, soliciting, or negotiating contracts of insurance or annuity on behalf of an insurer licensed in VA or receiving or sharing directly or indirectly any commission or other valuable consideration arising from the sale, solicitation, or negotiation of any such contract or both.

ALTA Owner's Policy Schedule B (Exceptions to Coverage)

Additions to the standard exceptions

Title Policy Endorsement - Multiple Parcels

Adjoining parcels use this to ensure against loss due to gaps, trips, or gores between or separating the boundaries. -sometimes blanket mortgages are utilized.

Virginia Title Commissioner Of Insurance Duty Deligation

Administration of CE Program can be transferred from outside admin that: 1. Maintains records reflecting CE status 2. Provides Commission w/reports and records concerning licensees who have met requirements. -bd receives this infor as necessary. 3. Peformance is confirmed at least annually. *proper corrective actions is taken for deficiencies.

Title Policy Endorsement 7.1-06 Manufactured Home

Adopted by ALTA at Fannie Mae request so can foreclose on manufactured home/land together.

C Corporation

Advantages: 1. Stockholders only liable to extent of share value. 2. Perpetual lifespan 3. Change in ownership by purchase/selling/gifting stock.

Disclosure of Consumer Report to Consumer:

Adverse action to consumer from info on consumer report the user of report may disclose. *Also when consumer requests disclosure.

Disputing consumer reports

Agency must investigate disputed info free of charge and: 1. Resolve within 30 days. 2. Notify person who supplied disputed info w/i 5 days of consumer notifying. Agency must delete if: 1. Inaccurate or 2. Unverifiable information *if agency keeps information consumer can submit brief statement concerning the disputed information.

Virginia Title Title Agent defined

Agency/agent that performs all of the following services for the insurance of title insurance policies, subject to the underwriting procedures and guidelines of the agent's title insurance company: 1. Evaluation of title search to determine the insurability of the title. 2. A determination of whether or not underwriting objections have been cleared. 3. Actual issuance of the policy or policies and endorsements of the title insurance company.

Virginia Title Commissioner Of Insurance Prohibitions on Agents

Agent whose appointments by an insurer has been terminated by the insurer is prohibited: 1. From selling or soliciting applications or policies on behalf of that insurer unless: a. unless and until reappointed by insurer. *continuing to sell is a violation and subject against penalties.

Virginia Title Commissioner Of Insurance Agent

Agent's responsibility to report the following to the Commission" 1. Change of Residence - must report to Commission and insurer w/in 30 days. 2. Termination Upon Changing Residence. If move from VA terminates (authority to act as resident agent immediatly terminates, regardless of whether Commission was notified). 3. Felony conviction - 30 days and must include facts/details. 4. Administrative Action - 30 days must report final disposition of any admin actio taken against him in another jurisdiction or by gov't agency in Va. -report must include a copy of the order, consent to order or other relevant legal documents.

Virginia Title - Chapter 2 (Slide 65) Uniform Trade Practices Va. Code 38.2 Sec. 500-518 Notice of Information Collection and Disclosure Practices

Agent/agency must provide notice of insurance information practices to all in connection with transaction. Timing for New Policy: a. At time of delivery of policy or certificate when persons information is collected only from applicant through public records. b. At time of the collection when personal info collected from source other than public recoreds; or c. When an application is made by phone and personal information is collected from source other than applicant or public records 1. Orally with follow up 2. In writing (can be email if person agrees and given no later than time policy/certificate is delivered)

Virginia Title - Chapter 2 (Slide 65) Uniform Trade Practices Va. Code 38.2 Sec. 500-518 Blank Forms

Agents cannot have insurers fill out blank forms or incomplete forms.

Virginia Title Commissioner Of Insurance Sources of CE credits

Agents must not receive more than 75% of their required credits from courses provided by insurance companies or agencies. Board decides at time of course approval if CE = insurance company or agency sponsored. All course sponsors are required to provide this information clearly and conspicuously to all enrolled.

Subordinations

Agreeing to lower priority. Mortgage is a subordination because owner agrees to lower interest. *Subordination with title should only be used with like/kind interests Ex. fee simple title mortgage should not be subordinated to a leasehold mortgage.

Lease

Agreement between two parties. Lessor gives the lessee the right to possess property for specified period for consideration. *generally if 3 years or more must be filed in government recording office. (Can be covered by title insurance).

Assessments

Aids in determining value of property which impacts amount of title insurance. a. Tax Assessment - used to derive value a willing buyer will pay and seller will sell. b. Property categorized (more expensive near city). c. Building tax assessments - residential buildings must conider foundation, basement, roof, floors, heating plant, plumbing, lighting, square footage etc.)

ALTA Owner's Policy Conditions Definitions Unmarketable Title

Alleged/apparent matter affecting title to the land (not excluded by exceptions) which would entitle a purchaser of RE or interest to be released from the obligation to purchase by virtue of contractual condition requiring the delivery of marketable title.

ALTA Owner's Policy - Arbitration

Allowed - either company and/or insured may demand arbitration if less than 2 million; both must agree if 2 million. *binding arbitration under ALTA terms. Matters that may be Arbitrated: 1. Claim between the company and insured arising out of or relating to policy. 2. Service in connection w/its issuance or the breach of policy provisions; or 3. Other controversy or claim arising out of a transaction that resulted in the issue of the title policy.

Title Policy Endorsement - Aggregation

Allows for multiple amounts of insurance w/respective loan policies to be listed as aggregate. -can set one liability for multiple policies -payment on one reduces future insurance amount for all.

Va Loans

Allows veterns to purchase federally insured or guranteed home with no down payment. *US veterns who serve on active duty for more than 90 days wartime or 181 continuious days. Limits: 1. $417K max 25% guranteed

Title Exam Summary is also known as:

Also Known As: 1. commitment report 2. title report 3. encumbrances report 4. preliminary report, or 5. abstract of title

Virginia Title - Chapter 2 (Slide 65) Uniform Trade Practices Va. Code 38.2 Sec. 500-518 Notice of Information Collection and Disclosure Practices Information Concerning Previous Adverse Underwriting Decision

An adverse underwriting decision may not be based on: 1. Previous adverse underwriting decision 2. Previously obtained insurance coverage through the residual market mechanisms. HOWEVER, can base decision based on info obtained by a person who made an adverse decision. 3. On personal info received from an organization whose primary source is insurance institution. -can use the fruit of a poisonous tree. *No insurance institution or agent may base an adverse underwriting decision solely on the loss history of a previous owner of the property to be insured.

Real Estate Escrow (done by attorney or escrow officer)

An impartial third party that acts only as authorized by the parties: Responsibility: 1. Fiduciary 2. Every transaction accounted for. 3. No commingling of funds 4. Deposits and disbursements must have supporting documents. 5. Deposits made immediately. 6. Ordering title reports, securing payoff demands, obtains lender documents, clears title, issues receipts and funds, prorates taxes, procures title insurance, determines when escrow can close, records documents, disburse funds.

Virginia Title Commissioner Of Insurance CE Fees - self supporting

Any costs incurred by Commission/Board (expenses, legal fees, duties) are paid by agents for class. -fees not returnable unless collected in error.

Virginia Title Commissioner of Insurance Confidentiality

Any information possessed by Commission that is furnished by insurer/emplyee or obtained in investigation is confidential and privileged by law. -general public cannot review -not discoverable in civil action -cannot be called to testify about it Commission is authorized to use info to carry out regulatory or legal action brought as part of Commission duties. -can also release final, adjudicated actions, including for cause termination that are open to public.

Failure to Cause Disbursements

Any person suffering losses due to failure of lender or SA to disburse as required by applicable laws is entitled to recover in addition to actual damages: 1. Double the amount of any loan interest received or charged by the lender before the closing occurs and 2. Reasonable af incurred.

Ariel Maps

Are also known as tax maps and show lots within the town to define parcels. (If town does not have US Dept. Of Agricultural does).

Virginia Title Commissioner Of Insurance Appointment Records

Are public and available during normal hours of the commission -can charge reasonable fee to copy

Lawyer's Title Opinon

Became the norm as property was more complex. -some states required lawyers to issue opionions known as certificates of title. *first policy late 1800s

Government Records

Birth/death certificates - Vital Record Bureau (can help construct a descendancy chart) *Census records may find missing heirs. *can only use if 72 years or older; otherwise = confidential

Mortgagor

Borrower

Virginia Title Commissioner Of Insurance Licensing Exam Business Entity

Busineess entities acting as insurance producers must obtain an insurance producers license. Requirements: 1. Pay fee 2. File documents 3. If domestic corp. file articles of incorporation w/ Commission clerk and have been issued a charter by commission. 4. If domestic LLC, filed articles of incorporation w/ clear and have been issued a charter. 5. If domesetic limited partnership, applied for and recieved a certificate of limited partnership from clerk of commission. 6. If domestic partnership, have filed its partnership agreement with the clerk of the appropriate court. *businesses must designate a licensed producer responsible for the business entitys compliance with insurance laws, rules, and regulations of VA.

Escrow Dispute

Buyer and seller can agree to place escrowed funds, in interest baring account until dispute is settled, then funds go back into escrow.

Loss Cannot Be Catastrophic

Catastrophic = several exposure units lost at the same time: Exceptions: flood, windstorm, earthquake (reinsurance helps spread this risk).

Title Policy Endorsement - Environmental Protection Liens Endorsements

Can be residential or commercial. Protects because EPA loans can take priority. -can except some liens in Schedule B

Virginia Title Commissioner of Insurance Examination

Can make an examination into affairs of any person licensed to transact any insurance business in VA if the best interest of people in Va. May examine: 1. Person having contact with exclusive or dominant right to manage or control any licensed insurer. 2. Any person holding shares (either as voting trustee or otherwise) of capital stock of any domestic insurer. 3. Any person engaged in proposing or claiming to engage in promotion/formation of a domestic insurer. 4. Any person seeking a license to transact any insurance business in Va. *every insurer licensed in Va is examined by commission every five years. Scope: records relating to the alleged writing of insurance in Va. -includes agents (see if violations) -failure to comply = penalties

Virginia Title Commissioner of Insurance Illegal Compensation Exception - Title Agents

Can only get premiums unless applicant consents in writing before services are rendered with following acknowledged: 1. Person's signature 2. Duration of services, 3. Amount of fees charged (corresponding services) 4. A statement that the agent is entitled to receive a commission from the insurer for selling, soliciting, or negotiating insurance AND A SCHEDULE FOR FEES AND DOCUMENTATION FOR SERVICES RENDERED IS MAINTAINED AT AGENTS OFFICE AND MADE AVAILABLE TO THE PERSON UP REQUEST. Exception: charges for title examination services when provided by title insurance agents.

Immunity for Persons Disclosing Private Information

Cannot bring actions for defamation, privacy, negligence against person for disclosing personal or priviledged information according to privacy protection laws. -or for disclosing to an insurance institution agent or insurance support grou. However, NO immunity for supplying false information w/malice and intent to injure.

Virginia Title - Chapter 2 (Slide 65) Uniform Trade Practices Va. Code 38.2 Sec. 500-518 Prohibited Inducement

Cannot offer stock etc for promising returns and profits as an inducement to insurance.

Tenants in the Entirety

Cannot sell without both parties consent

Virginia Title - Chapter 2 (Slide 65) Uniform Trade Practices Va. Code 38.2 Sec. 500-518 Pre-Text Interviews

Cannot use a pretext interview to obtain info in connection with an insurance transactions. Pretext interview = an interview where the person attempting to obtain information does the following: 1. Pretends to be someone they are not. 2. Pretends to represent someone they are not. 3. Misrepresents the true purpose of interview or 4. Refuses to identify themselves. *1 exception to allow pretext interviews - when a reasonable basis for suspecting criminal activity in connection with a claim is known. -The commission must have info to review to determine a reasonable basis.

Legal Descriptive terms

Checks (largest square in surveyed area 24 miles by 24 miles). Each check has 16 townships. Townships are about 6 miles square. Townships broken down into 36 sections (one mile square). *townships near the north will be smaller. (smaller parts called "fractional sections." **numbered n and s from baseline; numbered consecutively east and west from principal meridian.

Metes and Bounds Bearing System

Circle used to divide into 4 quadrants

Virginia Title - Chapter 2 (Slide 65) Uniform Trade Practices Va. Code 38.2 Sec. 500-518 Commission Authority

Clerk of the Commission deemed to be able to accept notice for organizations transacting business outside of VA but effect VA residents on issues related to privacy and protection laws.

Virginia Title - Chapter 2 (Slide 65) Uniform Trade Practices Va. Code 38.2 Sec. 500-518 Notice of Information Collection and Disclosure Practices Commissions Authority

Commission can examine and investigate affairs of any ins institution or agent to determine if they are engaging in prohibited conduct. (Includes in and out of VA if they have affect on Va.)

Virginia Title Commissioner of Insurance Revoking/Suspending of Business Entity License

Commission can revoke after notice and opportunity to be heard, if found that: 1. Individual licensee acting at the direction of the business entity was known to violate 2. Violation was not reported nor corrected.

Virginia Title Commissioner of Insurance Powers

Commission has the power to: 1. Examine and investigate affairs of agents/insurers to ensure: a. Regulations followed b. No unfair competition c. Can gather info on trade practices d. Ensure practices fairly serve the public interest.

Virginia Title Commissioner Of Insurance Non-Resident Business Entity Licensure

Commissioner will require non-domestic entities to produce proof of lawful existence in another state. 1. Usually satisfied by certification by the insurance department of the business entity's home state. 2. If corporation it must obtain a certificate of authority to transact business in Virginia 3. If LLC or limited partnership - must obtain a certificate of registration to transact business in VA before the Commissioner issues a license to such business entity.

Virginia Title - Chapter 2 (Slide 65) Uniform Trade Practices Va. Code 38.2 Sec. 500-518 Notice of Information Collection and Disclosure Practices Commission Authority Hearings and Procedures

Commmission can upon belief there is prohibited conduct by institution/agent 1. Issue and serve a statement of charges and notice of hearing. a. 10 day notice (after date of service) b. Opportunity to answer/present evidence. -adversely affecting people can intervene.

ALTA Owner's Policy - Subrogation

Company steps into shoes of insured and the insured must execute all documents to allow them to recover. *insurer must company to sue/compromise, settle in their name.

Abstracts

Comprised of all instruments (mortgages/deeds/leases, etc) which affect land -use to be lawyer now independent

Mortgage - Two party instrument

Conditional conveyance of property as security for payment of debt. Includes: 1. Names 2. Legal description 3. Statement of security 4. Type of debt 5. Repayment terms *discharged by release of mortgage or satisfaction.

Statement of Information

Confirms identity of buyer/seller

Restrictions

Considered an encumberance. Restriction Types: 1. Public restrictions: Zoning/building 2. Private: HOA *more restrictive of two applies

ALTA Owner's Policy - Conditions

Contains 18 items (starting with definitions)

ALTA Title Committments (2006 version)

Contains the following: 1. Information page 2. Table of Contents 3. Agreement to Issue Policy 4. Schedule A 5. Schedule B (Requirements and Exceptions) 6. Conditions 7. Definitions 8. Claims 9. Preliminary Title Report

ALTA Owner's Policy (rev 6/17/2006)

Contents: 1. Covered Risks 2. Exclusions from Coverage 3. Schedule A 4. Schedule B 5. Conditions 6. Continuation of Coverage 7. Notice of Claim 8. Defense of Prosecution of Action 9. Duty to Cooperate 10. Claimant Records 11. Termination of Liability 12. Settlement 13. Determination and Extent of Liability 14. Extent of Liability 15. Limitation of Liability (Litigation or Voluntarilly Assumed). 16. Payment of Loss 17. Subrogation (steps in shows of insured) 18. Arbitration 19. Severability 20. Choice of Law - where land located in state/federal court. 21. Notices - defines where must be given to company 22. Optional Schedule C

Escrow Agreement

Contract between buyer/seller/escrow agent and sets parameters and conditions.

National Association of Insurance Commissioners (NAIC)

Created guidelines for states to put the law into action. (Generally, states require that any employee of an insurer who has been previously convicted of a felony involving dishonesty obtain Insurance Commissioners written consent. -there is a form to obtain consent.

Virginia Title - Chapter 2 (Slide 65) Uniform Trade Practices Va. Code 38.2 Sec. 500-518 Defamation

Defamation - illegal to make a knowingly false or maliciously critical statement about others in the insurance business. Illegal to: publish disseminate or circulate (direct/indirect) or encourage that which is false and malicious or derogatory.

Tennants in common

Default when: 1. If more than one owner and 2. No tenancy designated % in any proportion but must = 100%

ALTA Owner's Policy Defense and Prosecution of Action

Defense coverage provides for defense of the insured in litigation which 3rd party assets claim to title. a. Company chooses counsel of choice or does not have to pay fees. Prosecution of Action - company may institute and prosecute as necessary to establish title or reduce loss or damage. -may take action under policy terms regardless of whether liable to insured (not admission nor waiver of company) Insurer retains right to move to litigation and appeal, etc.

Title Policy Endorsement - Severable Improvements

Defined as property affixed to the land on or after date of policy that by law does not constitue real property; may be severed w/o material damage.

ALTA Title Commitment Conditions - Defects

Defined in the commitment as of the commitment date; and may arise between the commitment date and before the policy is issued. *in the event that defect appears after commitment date and date on which requirements of a and c of schedule B are met, then the exceptions of Schedule B may be amended.

Escrow

Delivery of property/money to third party (acts only as authorized by the parties. Held until the conditions are met. In RE deed delivered to 3rd party until conditions are met by grantee.

Opening Escrow

Deposit money turned into escrow firm with instructions. Escrow requirements: 1. Enforceable contract. 2. Valid deed (depositing the deed with the intent to surrender the possesion. 3. Conditions specified to take effect before escrow deposit takes effect.

Deed

Document under seal used to transfer real property

C Corporation

Disadvantages: 1. Double taxation. 2. Lender's may require personal guarantees from the corp officers for the loans to the business.

Referrals to Affiliated Settlement Service Providers

Disclosure: Referral to an affiliated settlement service provider must be disclosed in accordance with RESPA: -unless person's ownership interest is 1% or less of capital stock

Virginia Title Commissioner Of Insurance Agent CE Requirements

Every resident/nonresident title insurance agent must on a biennel basis furnish evidence that CE requirements have been satisfied. 1. 16 hours of relevant ce credits. 2. If hold more than one license 24 hours in each category they are licensed. *3 must be insurance ethics (insurance law and regulations applicable to VA).

ALTA 2006 Loan Policy Schedule B

Exceptions from coverage. *lists exceptions which involves matters subordiante to the lien of the insured mortage.

Eminent Domain Exclusion from Title Insurance Policy

Excluded from policy unless provided for a: 1. Covered risk (to be covered there must be a notice of exercise of the right in the public records.)

Federal Fair and Accurate Credit Transaction Act (FACT)

Expands on protection in FCRA (with intent to decrease errors). Protections: Can review information 1 x a year for free and notice of the fact they can dispute.

ALTA Owner's Policy - Determination and Extent of Liability

Explains how the insurer will determine the amount of loss or damages (extent of liability and effect of liability compared to land). Determination (Indemnity) - amount of loss/damage based on actual monetary loss or damage incurred because of matters insured against by the policy.

Virginia Title - Chapter 2 (Slide 65) Uniform Trade Practices Va. Code 38.2 Sec. 500-518

False Advertising - cannot publish, circulate, etc any untrue assertion or representation or statement relating to: a. The business of insurance or b. Anyone in the conduct of his insurance business whic is untrue, deceptive, or misleading.

Virginia Title - Chapter 2 (Slide 65) Uniform Trade Practices Va. Code 38.2 Sec. 500-518 False Financial Statements

False Financial Statements: it is illegal to: a. Knowingly File with public office false statement of material fact related to finances. b. Knowingly Make false entries c. Knowingly faile to make true entry into books.

Metes and Bounds

Feet are the unit of measurement Natural monuments used (trees/streams). Also, use adjoining land description. Artificial monuments also used posts/pipes.

Virginia Title Commissioner Of Insurance Assumed or Fictitious Name

Fictitious Name - if using a fictitious name must notify the Bureau of Insurance the name under which the individual or entity will be doing business. -notification made at date of application or w/in 30 calendar days from date of the assumed or fictitious name is adopted. -if stop using fictitious must notify w/in 30 calendar days

Escrow Funds

Fiduciary Responsibility: 1. Must hold in separate fiducary trust account or accounts in a financial institution licensed to do business in VA. -must be submitted no later than close of 2nd business day from receipt. 2. Must be applied in accordance with terms of escrow. -must only be disbursed in pursuant to written instructions or agreement with specificity (directional). 3. Title insurane premiums payable to title insurers or agents may be: a. Held in SA escrow identified and itemized by file name/number. b. Disbursed in form of check drawn on escrow account payable to title insurer or agent but maintained within settlement file of SA. c. Transferred within 2 business days to separate title insurance premium escrow account that is identified for that purpose and separate from business or personal funds. *SA may not retain any interest in funds in connection with transaction

general warranty deed (best for grantee)

Full covenant and warranty deed. Transfers title and also includes several warrants from the owner; warrants that: 1. Grantor is the owner in fee simple with right to convey 2. Grantee's ownership will not be interfered with 3. Land is free of incumberances 4. Grantor will procure any documents necessary to assure title. 5. Seller will warrant title for property forever.

Fee Simple

Full ownership and control (assume FS if deed not not specify type of estate).

Consequences of Fraud

Generally courts only award damages if intentional. -Award = true value of property based on true statement and full knowledge. -if not credible court will assume competent party should have known.

ALTA Title Committment Title Page

Generally explains committment = contract, states the policy to be issued covers certain risks to the title, in accordance with terms and limitations.

Virginia Title Commissioner of Insurance Hearings

Generally, prior to revocation or refusal to issue must have a hearing. Procedure: 1. Commission gives 10 calendar days notice of time/place of hearing. 2. Notice = statement of objection to issue or issue. 3. Registered or certified mail (last address) 4. Can summon witnesses. Denial after hearing - cannot reapply for 5 years from date of Order. *Commission can also add additional penalties.

Consumer Reports

Generated by consumer reporting agency in connection with credit transactions. Can be generated in two circumstances: 1. Court Order 2. Consumer provides written authorization.

Principal

Gives agent authorization to represent him. Principal is responsible for: 1. Agent's actions w/in scope. 2. The insurance company.

Trusts

Grantor of trust = property owner

Corporations

Group (usually 3 or more) who act as one individual. Formed by filing documentes and issuing stock. *Liability limited to the value of the stock the stockholder owns (generally what is contributed).

Exposure

Hazard or peril that can cause harm or loss along with the scope of harm or loss it can cause. (All exposures must be identified and analized so the consequences and expenses can be determined.)

Insurance Protection

Helps reduce the exposure to risk of loss and damage related to title. -protecting of an issue that may have occured in the past. -encumberances which cannot be cleared are noted as exceptions. (If not excluded or an exception insurance company pays for resulting damage.

Trustee

Holds property for benefit of beneficiaries

Reasons for Title Insurance

Human error- even with the UTMOST careful examination a hidden defect can arise. Title insurance provides protection needed from the loss or damage that can arise from such undiscovered risks.

Virginia Title - Chapter 2 (Slide 65) Uniform Trade Practices Va. Code 38.2 Sec. 500-518 Information Security Program (ISP)

ISP - each insurance institute must have procedures to safeguard confidential information. ISP's must: 1. Ensure security and confidentiality 2. Protect against threats/hazards. 3. Protect against unauthorized access which could result in substantial harm or inconvenience.

Virginia Title Commissioner of Insurance Cease and Desist

If Commission believes that any person is violating rules must issue and serve an order (via certified or registered mail) that states: 1. Statement of Charges 2. Notice of hearing on charges (time/place) -at least 10 days after receipt of notice. -allow person to be heard as outlined by commission. 3. Order must require person to show cause why an order should not be made requiring cease and desist from further violations. -if violation found may serve by cert/registered mail an order with findings and cease and desist. -other appropriate remedies to serve public.

ALTA Owner's Policy Payment to the Insured

If a company settles via payment, insurer no longer has any liability or obligation.

Restrictions, Limitations and Conditions to Title Insurance

If a violation of a restriction, limitation or condition of property is known at the date of the policy, it is included in the exceptions to coverage. (some may be insurable depending on survey).

ALTA Title Commitment Conditions - Existing Defects

If any defects, liens, or encumberances that are existing at the Commitment Date are not shown in Schedule B, the insurer may amend Schedule B, to include them. *as long as insured did not know of such defects/liens and did not tell insurer about them in writing, the insurer is liable as stated under the Limitations of Our Liability Condition.

Virginia Title - Chapter 2 (Slide 65) Uniform Trade Practices Va. Code 38.2 Sec. 500-518 Notice of Information Collection and Disclosure Practices Correction/Amendment/Deletion of Recorded Personal Information If individual disagrees with instituions refusal to correct

If individual disagrees with the insitutions refusal to correct, he can: 1. File a concise statement on why they think it must be changed. 2. Concise statement of why they disagree w/refusal. Insurance company must: 1. File statement with disputed info and means by which anyone reviewing the disputed personal info is made aware of individuals statement. 2. Must clearly identify matter in dispute in future and provide individuals statement. 3. Furnish statement to persons as required. *All natural persons can dispute if information about them. **rights do not extend to information about them related to and collected in connection with civil/criminal proceedings.

Virginia Title Commissioner Of Insurance License Termination and an Agent who Moves

If resident agent license terminates b/c 1. w/in 180 calendar days prior to the end of the biennum, or 2. prior to the expiration of appeal period for biennium, the agent moves his residence AND 3. moves w/o notice and did not show compliance -NOT permitted to apply for a new license of the same type until the agent has complied with requirements of non-resident license applicant.

Virginia Title Commissioner Of Insurance Termination of Title and Settlement Agents

If the agent is not appointed with an insurer w/183 days, the agent's license automatically terminates. Waived or extended if: 1. Good cause and 2. Fee paid

Real Estate Settlement Agent's Duty Related to Purchase of RE

In connection with purchase or sale of residential real estate, the SA must obtain from purchaser: a. Written statement prior to disbursement which states that the SA notified him: 1. The purchaser may wish to obtain owner's title insurance. 2. The general nature of the coverage. 3. That the purchaser does or does not desire such coverage.

Conditional Contracts (insurance contracts are)

Include provisions which qualify or limit the obligation of the insurer in the insurance policy.

Real Estate Legal Description

Includes the following: 1. Must positively identify the property. 2. For Raw land - complete legal description necessary. 3. In a deed: assignment of lease, title insurance policy or mortgage, the description must be the complete legal description. What to do if there is a discrepancy in legal description: 1. Legal advice 2. Court interprets (intent/documents).

ALTA Title Commitment - Conditions

Includes those related to definition of later defects, existing defects, limitation of liability, and claims

Preliminary Title Report

Includes: 1. Owners of the property 2. How title is currently held 3. Exceptions and liens (other encumberances) not covered under title policy 4. Legal description including plat map *shows the type of title insurace that will be offered along with any: a. Exclusions b. Exceptions *may include records such as DOT, easements, and covenants, conditions and restrictions.

Abandonment

Individual with rights to property VOLUNTARILY surrenders rights w/o vesting rights in another and w no intention of reclaiming.

Virginia Title - Chapter 2 (Slide 65) Uniform Trade Practices Va. Code 38.2 Sec. 500-518 Insurance Information and Privacy Protection

Information gathered under insurance laws = protected when for personal, family or household HOWEVER not protected for lenders policy. What is NOT protected in Va.: 1. Information gathered by public records or governmental authority and maintained by an insurance institution or its reps for purpose of insuraing title to real property in Va. *recorded items = public record.

Virginia Title - Chapter 2 (Slide 65) Uniform Trade Practices Va. Code 38.2 Sec. 500-518 Notice of Information Collection and Disclosure Practices

Information related to notice: Questions designed for market or research related to ins. must be specified as such.

Life Estate Title Insurance

Insurance can be issued to protect the interest. Life estate owner = tennant (can sell their interest, mortgage or lease that interest) *not very marketable since unknown length **life estates usually accomplished via trust now b/c more flexible.

Law of Large Numbers

Insurance companies require lots of exposure units because chance of loss is more predictable. (More accurately predict premiums).

ALTA Owner's Policy Continuation of Insurance Clause

Insurance continues while insured retains an estate or interest in land

Title Policy Endorsement - Identified Risk Coverage

Insurance due to loss or damage identified risk in B

Assurance v. Insurance

Insurance is not an absolute assurance. Policy contains some representation of title as of date of policy.

ALTA Owner's Policy Conditions Definitions Insured

Insured - party in schedule A, certain successors and grantees (via operation of law)

ALTA OWNER'S POLICY Covered Risks

Insured against on date of policy (w/some that extends after) but limited to the amount of insurance as stated on the policy's Schedule A. Covered Risks include: 1. Other interests 2. Defects in lien, encumbrances 3. Interests disclosed by an accurate and complete survey. 4. Unmarketable title 5. Lack of Access (landlocked coverage unless exception). If easement it will be referenced and road access may require a survey. 6. Enforcement action based on the exercise of gov't police power. 7. Rights of eminent domain if recorded. 8. Taking by gov't body binding on rights of a purchaser for value w/o knowledge. 9. Title problems due to fraud. 10. The expense of defense.

ALTA Owner's Policy Conditions Definitions Insured Claimaint

Insured claiming loss or damage

ALTA Owner's Policy Conditions Duty to Cooperate

Insured must cooperate with company (including retaining counsel of insurer's choice) and give aid in defense. -Failure to cooperate terminates coverage -Insured may have to submit to examination.

Virginia Title Commissioner of Insurance Failure to Report

Insurer failing to report or report with actual malice Commission can suspend or revoke.

ALTA Owner's Policy - Limitation of Liability

Insurer has no liability for loss/damage until final decision (appeals exhausted) by court. -insurer not liable for loss/damage voluntarily assumed the insured in settling w/o written consent. -payments under the policy reduce amount of insurance (except attorneys fees).

Loan/Lender's Title Policy

Insures a mortgage companies interest in the title. 1. Liability of insurer decreases over time b/c loan amount decreases. 2. Includes a provision that in event of foreclosure, policy becomes an owner's policy (b/c lender takes possession and has an "owner's interest." 3. Broader coverage than owner's. 4. Written for loan amount, and once mortgage is paid off policy ceases.

Truth in Lending Act (TIL)

Integrated loan estimate format with CD. Requirements: 1. Must be provided w/in 3 days of creditors receipt of loan application. 2. Good Faith Estimate 3. Creditor must honor estimate (despite clerical errors) -revised estimates only given under certain conditions. -must wait 7 days to issue the loan after the estimate is delivered/mailed *if rejected, no loan estimate is required.

Life Estate

Interest in RE over course of person's life (owner of life estate does not have the right to sell/mortgage/devise by will).

Closing Protection Letters (CPLs)

Issued by title insurers: a. Insurer indemnifies lender, purchaser or lessee for breach of duties by the closing agent or attorney. *ALTA has a standard CPL form **Insurers also have their own

Consideration of Federal Tax Liens

Joint Ownership - may only effect interest of one joint owner depending on form of ownership. 1. Joint Tennancy - lien only attaches to person with debt. Therefore, if they die it does not attach. 2. Tenants by the Entirety - If both spouses responsible it attaches if one dies and remains with survivor. 3. Tenants in Common - if the lien is attached to one tenant's interest and the tenant dies, the lien continues onto the heir who receive the interest.

ALTA Owner's Policy Conditions Definitions - Land

Land as described in schedule A along with improvements affixed to land which constitutes real property by law. *does not include property beyond the lines.

Cemeteries from Title Insurance Policy

Land on which cemeteries and burial grounds are located have special rules of property applicable. (Such land is not insurable).

Land Trust Liens

Land trusts may protect owners from judgement b/c owned by multiple people. *not effected by intestacy because trust terms define.

Leaseholder Title Coverage

Leasehold estate = possession but not ownership. 1. Estate for years - determined ending and beginning. 2. Periodic estates - month to month (automatically renews and does not end until one party terminates the agreement.

Virginia Title - Chapter 2 (Slide 65) Uniform Trade Practices Va. Code 38.2 Sec. 500-518 Legal Remedies for Individuals:

Legal Remedies for Individuals: If privacy rights violated can seek equitable relief and institution/agent liable for damages sustained by the individual. -the award cannot exceed actual damages sustained. -the court can award costs/fees. -2 year SOL (from date should have been discovered)

Mortgagee

Lender

Initial & Annual Escrow Statement

Lender provided: 1. Initial - estimated taxes, insurance premiums, other charges. 2. Annual - includes all deposits to account and payments made from it; balance. *servicing transfer statement.

Virginia Title Commissioner Of Insurance Licensing Exam Individual

Licensing Examination: 1. 16 hour course 2. Pass exam (unless agent prior to Jan 1, 1987) Basic qualifications: good character, reputation for honesty, take exam, pay fee. (includes look at bankruptcy/criminal records).

Virginia Title Commissioner Of Insurance

Licensing: 1. Purpose: to ensure agents are educationally prepared in lines of insurance they will offer and that they meet certain character standards. 2. Includes pre-licensing education requirement, exam, and having insurance department evaluate applicant.

Mechanic/Materialmen's Lien from Title Insurance Policy

Liens by contractor/sub for work on the property Varies by state but file memo with court that is recorded w/in the specified period. Insurance may require documents related: a. Affidavit b. List of contractors (waivers from them)

Schedule B in title committment

List of conditions and exclusions in the committment

Title Policy Endorsement 1-06 Street Assessments

Loan Policy - covers loss/damage due to assessments for street improvements (which gain priority). *used when policy does not include coverage for street assessment.

Title Policy Endorsement - Condominium

Loan or owners Loss or damage due to unit not being properly identified as part of a condominium w/in meaning of its definition in its jurisdiction.

Title Policy Endorsement Variable Rate Mortgage Neg. Amoritization

Loan policies Insures against: 1. The invalidity of lien of the insured mortgage resulting from interest issues. 2. Change in the rate of interest 3. Addition of unpaid interest to the principal 4. Priority of lien 5. Insures unpaid interest

Title Policy Endorsement 2-06 Truth in Lending

Loan policy - attaches for loss or impairment due to exercise of rights from TILA. -protects against any valid final judgment that insured mortgage has been terminated due to foreclosure.

Surveys v. Location Drawings

Location drawings not as complex; cost less and are created by public record *location drawing is usually sufficient to obtain a mortgage. **insurance usually requires a survey.

IRC 1031

Loss or gain from certain exchanges not recognized for tax purposes Like-kind - IRS allows all real estate to be considered like-kind under exchange regulations. Must be trade for equal or more equity and equal or more FMV.(exchanger must replace any mortgage paid off at the sale w/an equal or more mortgage on replacemnt). -net proceeds from replaced property must be used as downpayment on the replacement property *w/in 180 days same name on title

Title Plants

Major databases maintained by title insurance companies that contain title records. Methods: 1. index cards 2 punch cards, 3. tract books 4. computerized data basis

Virginia Title - Chapter 2 (Slide 65) Uniform Trade Practices Va. Code 38.2 Sec. 500-518 Unfair Discrimination

Many anti-discrimination provisions: A. For agents the cannot discriminate: 1. Discriminate against individuals in same class and equal expectations of life in dividends or other benefits payable on contract. 2. Refuse to insure, continue to insure, or limit the amount, extent, or charge different rates for save coverage due to blindness, mental or physical impairment. (Unless refusal/limitation is based on sound actuarial principals.). 3. Discriminate by geographic location unless: a. Refusal is not a pretext to unfair discrimination. b. Refusal/cancellation is required by law or regulatory mandate. 4. Based on age unless refusal not a pretext. 5. Consider the status of a victim of domestic violence in any decision related to the insured.

ALTA Owner's Policy - Extent of Liability

Maximum will not exceed lesser of amount of insurance listed in Schedule A. (amount increased by 10% if insurer pursues right to prosecute/defend claim.)

ALTA Owner's Policy Claimant Records

May be required to produce records for and grant permission, in writing, for copy/review which needed to determine loss/damage.

ALTA Title Commitment Schedule B - Exceptions

May be result of personal inspection or items found through a survey and/or title record. -specific exceptions related to mechanic's liens or other liens, notices of action or underwriting issues are included.

Retention (handling risk)

May be retained b/c avoiding or reducing is not economically or otherwise feasible. (usually used when risk is insignificant).

Title Examination - Historical Societies

May contain unrecorded deeds, maps, letters. *also sometimes have a catalogue of names which help locate heirs.

Virginia Title Commissioner of Insurance Non-Licensed Individual

May refer a customer who seeks to purchase insurance to a licensing agent and receive compensation for the referral of a customer, as long as: 1. Referral does not include a discussion of of specific insurance policy terms and conditions. 2. Compensatin is in the form of one time nominal fee of fixed amount per referral. 3. Compensating does not depend on whether the referral results in the purchase of insurance by the customer.

Sharing (handling risk)

More than one person/entity bears the risk of loss.

ALTA Title Commitment Conditions - Definitions

Mortgage = mortgage, deed of trust or other security instrument. Public records = title records which give constructie notice o matters affecting the insured's title. *also notes that state statues where land located governs rules.

ALTA Title Commitment Conditions - Claims

Must be made based on commitment. Any claims, whether based on negligence or not, must be based on the commitment and is subject to its terms.

Insured losses

Must meet the provisions and definitions of a covered loss as described in contract: (Elements of cause, time, place, or amount must be defined per the policy's coverage provisions.)

Virginia Title Commissioner of Insurance Record Retention

Must retain all records about the insurance transaction for 3 previous calendar years. -must be promptly available for examination by commission (or employees) w/o notice. *What does not have to be retained = premium quotes not accepted by an insured.

Limited partnership RE documentation Required:

Need certified copy of cert of good standing, certificate from state, copy of partnership agreement, certified from general partners.

Cummutative Contract (Insurance Contracts ARE NOT)

No chance involved value = service

Title Policy Endorsement - Setback ordinance

No liability for insurer for invalidity due to ordinances.

Virginia Title Commissioner Of Insurance Agent/Agency responsiblity

No person or no insurer or licensed agent may knowingly permit a person to act in VA as an agent or transact business w/o first getting license.

Virginia Title Commissioner Of Insurance Non-Resident Reciprocity Licensing

Non-resident agents are not required to complete licensing examination if: 1. If reciprocity by the state for Va agents. To be licensed in VA non-resident agent must: 1. Show proof in a form acceptable to the Commission that the applicant is currently licensed as a resident in good standing in his home state. 2. Submit a proper request for licensure/pay fees. 3. Submit or transmit to Commission the application for licensure that he submitted with the home state in lieu of that application a completed Uniform Application.

Insurability

Not as strict as marketability

Virginia Title Commissioner Of Insurance Termination of Agent's License for non-compliance with CE

Not more than 15 days after end of appeal period, Board provides Commission with final record of agents not in compliance with CE requirements. a. Commission terminates the license of those who did not submit proper documentation in timely manner. 1. If contesting must a. Must adhere to Commission rules and those of the SC of Va. b. Must contest w/in 30 days of license termination or it is waived. *also terminates registration a title settlement agent. **can reapply after a new title insurance agent's license and appointment

Virginia Title - Chapter 2 (Slide 65) Uniform Trade Practices Va. Code 38.2 Sec. 500-518 Notice of Information Collection and Disclosure Practices

Notice Requirements: 1. Writing/electronic if policy holder agrees. 2. Must contain: a. Whether personal info collected from others. b. Types of info collected (types of sources) c. types of disclosures made and circumstances under which the disclousres may be made w/o prior authorizaiton if disclosures are frequent. d. Description of the right to access personal information and how info can be corrected. e. Information obtained from report prepared by an insurance support org. may be retained by org. and disclosed to other persons.

Virginia Title Commissioner of Insurance Agency Terminating Appointment

Notification: Any insurer or authorized rep of insurer that terminates appointment/employment w/agent must notify Commission w/in 30 calendar days. 1. Valid reason for termination with cause and couments must be provided. 2. Commission can request further info and documents. Must update if find later. Insurer must also mail a copy of notice to the agent at last known address w/in 15 days -if terminated for cause, insurer must provide notice via certified mail (return receipt requested) or overnight -agent has 30 days after receipt of letter and must file written comments concerning substance of notification to both prior employer and Commission..

Virginia Title Commissioner Of Insurance CE Deadline

November 30th (or next working day if falls on weekend) of each even numbered year. -must submit proof or exemption Can be extended to December 31 (or next working day). *failure to complete results in license termination.

Escrow Instructions:

Often drawn by escrow firm's own forms and includes: 1. Document held by firm. 2. What money is held/when deposited. 3. Conditions prior to closing. 4. Items to be prorated. 5. Fees paid by buyer/seller 6. Lender Escrow Instructions - these state what documents the lender requires the borrower to sign, insurance to be purchased, closing date, documents to return.

Virginia Title Commissioner Of Insurance Appointment

Once appointed, agent's license autorizes: 1. Individual agent to act as an agent until this license is terminated, suspended, revoked. -same principal with w/business entity licens authorizing it to act as agent.

ALTA Owner's Policy - Termination of Liability

Once company exercises its option to pay expenses and defends policy terminated (including obligation to defend/prosecute.

ALTA Owner's Policy - Payment of Loss

Once established must pay within 30 days in accordance with policy terms.

Limited Partnerships

One or more general partners along with limited partners.

Attachment

Order to protect a plaintiff from defendant disposing of property to avoid judement. Used when: 1. Property out of state 2. Property could be concealled 3. D may leave jurisdiction or not found

Aleatory Contract (Insurance Contracts)

Outcome is affected by chance and the values exchanged may not be equal (only pay for loss).

Title Policy Endorsement - Planned Unit Development

Owner or lender.

Title Policy Endorsement 3-06 Zoning Land Under Development

Owners and Lender's Protects where land under development. However, construction must be completed by site and elevation plans. -must be approved with letter from zoning authority.

Sole Ownership

Ownership by one person, one corporation, one partnership - in order to insurer title the insurer would require the spouse to relinquish title.

General Partnership RE documentation Required:

Partnership agreement is used to determine authority to sell. Fictitious business name w/state and business is assigned a tax ID.

ALTA Owner's Policy - Settlement

Payment to Other Parties: 1. When payment made against owner's interest under policy, the insurer may pay or otherwise settle with other party any claim under the policy in the name of or on behalf of the insured. *including fees up until the time of payment that the company is obligated to pay.

Virginia Title - Chapter 2 (Slide 65) Uniform Trade Practices Va. Code 38.2 Sec. 500-518 Notice of Information Collection and Disclosure Practice Content of Disclosure Authorization Forms

Personal/privileged material cannot be released without authorization which must include: a. Written in plain language b. Dated c. Specify the type of info released/disclosed d. Nature of information to be disclosed. e. Name of insurance institution/agent and identify types of representatives of the insurer to whom the individual is authorizing the insurer to disclose. g. Specify purpose for the collection. h. Advise that the person is entitled to receive a copy of the authorization. *person can seek access to own information and must be provided within 30 days. Can charge reasonable cost. Personal information - must identify source of information.

Types of Hazard (3)

Physical, Moral, Morale, Legal

Governmental Regulations Exclusions from Title Insurance Policy

Policy excludes loss or damage from any law, ordinance, permit, gov't regulation (including building/zoning) restricting, regulating, prohibiting or relating to: 1. Occupancy 2. Character/dimension or location of improvement 3. Subdivision on land 4. Environmental protection 5. Effect of any violations of these laws *also excludes loss/damage due to any governmental police power.

Virginia Title Commissioner of Insurance Cease and Desist Order Violation

Potential Penalties: Fines: 1. Willful violation - punishable by a penalty not to exceed $5K 2. Violation without knowledge or intent can punished each violaiton with a penalty not to exceed $1k -aggregate for series of similiar violations - max $10k

Principal duties of Insurer

Principal must: 1. Adhere to contract. 2. Pay commissions 3. Reimburse for losses from the agency's relationship. 4. Not interfere with agents ability to work. 5. Keep agent informed of products/industry and risks.

Foreclosure

Process used to enforce property rights of lenders (conventional mortgages/FHA, VA and other liens).

Virginia Title Commissioner Of Insurance Notice of Non-compliance.

Process: 1. No admin termination due to noncompliance of CE is effective until at least 30 calendar days written notice (via first class mail). To begin date mailed. 2. Board not Commission may grant extension After notice, agent can: 1. Provide proof they submitted evidence of compliance (up until date of deadline.) 2. Board does not have to review anything other than info that their records were correct.

Role of Title Insurance Producer

Producer is also the attorney or escrow officer who performs closing *not true in all states

Insurance Fraud Protection Act

Prohibits person convicted of felony involving dishonesty or breach of trust from engaging in or participating in the business of insurance UNLESS written consent from insurance regulatory official.

Virginia Title - Chapter 2 (Slide 65) Uniform Trade Practices Va. Code 38.2 Sec. 500-518

Prohibits unfair methods of competition or practice as follows: 1. Misrepresentation a. benefits/conditions/terms b. dividends/shares of surplus policy c. misrepresentation of previously paid insurance policy. d. use of name of policy/class does not reflect true policy. e. misrepresenting material fact for purpose of inducing, buying lapsing insurance. f. Misrepresentation of fact to affect a pledge, assignment, loan g. Misrepresentation of any insurance policy as being a share of stock. *cannot make or cause or allow false statements in order to ensure a benefit. **cannot affix a signature w/o authorization of person whose name appears on document. OR use such signature to altar document.

Transferring Trust Property

Property can pass through trust w/o having to go through probate.

Zoning regulations

Property is zoned by commercial and residential, restricting where homes may be built. May define density, lot size, size of the building, setbacks, architectural style, landscaping, signage, etc.

Title Policy Endorsement 3-06 Zonding

Protects against loss due to zoning issues. 3.1-06 - zoning completed structure.

Title Insurance

Protects against the risk of financial harm that arises from claims arising against the rights of ownership of real property. Ex. forgery/improper transfer/fruad/misstake.

Title Policy Endorsement - Private Rights Loan Policy

Protects enforcement of a private right in convenant affecting title as of date of policy. to mean - private change or assessment, option to purchase, right of first refulas, right of final approval of a future purchaser or occupant

Title Policy Endorsement - Interest Rate Swap Obligation

Protects priority if loss occurs from the swap obligation identified in the endorsement. -swap = exchanging risk between two parties. -interest rate swap - two parties agree to exchange payments based on defined principal (lower interest rate). Rates swapped for the defined period.

ALTA 2006 Loan Policy - Enhanced Homeowner's Policy

Provides significantly more coverage than standard. Additional covered risks: 1. Interest in title. 2. Rights affecting title due to leases contracts or other options. 3. Claims due to forgery or impersonation. 4. Right to limit the use of land. 5. Invalidity of assignments of the insured mortgage (if shown in Schedule A). a. Failure of an assignment shown in A to vest title to the insured mortgage in the named insured assignee to be free and clear of all liens. 6. Failure of the land. (street address/zoned residential) 7. Forced removal of structures due to zoning. 8. Structure built with invalid building permit.

ALTA Owner's Policy - Severability

Provides that if one or more provisions are found to be unenforceable, the rest of the contract remains enforceable.

Transfer

Purchase insurance to change risk (most common method).

RESA Disclosures on Residential Dwelling Units

RE that contains no more than 4 residential dwelling units must include certain disclosures: 1. One notifies the parties that the purchaser has the right to select the SA. 2. SA does not provide legal advice EXCEPTION: a. SA engaged in private practice of law in VA AND B. Engaged and retained by the party to the transaction for purpose of providing legal services.

Virginia Title - Chapter 2 (Slide 65) Uniform Trade Practices Va. Code 38.2 Sec. 500-518 Premium Rate Discrimination

Rates must be fixed in amount sufficient to furnish a reasonable margin for profit after provision for: a. Probable losses indicated by experience w/n and without this Commonwealth. b. Exposures to loss under policies. c. Allocation to reserves. d. Costs of participating insurance e. Operating costs and f. Other items of expense was fairly attributable to the operation of the title insurance business. *can charge risk rates which are negotiated these rates are pressed not to be unfairly discriminatory and not a violation if rates comply in other respects.

Real Estate Settlement Agent Defined

Real Estate Settlement Agent defined as a person who is not a party to the transaction who provide escrow, closing or settlement services in connection with a transaction related to real estate in Virginia.

Assignee

Receives contractual rights.

Title Examination - Registry of Probate

Record keeping arm of probate court (settles matters concerning divorces/name change/orphans)

affiliated business arrangement (ABA)

Referral of a client to a financially controlled business whose earnings are shared with the broker. Defined: person who is in position to refer business incident to or part of real estate settlement. *either directly or indirectly refers such business or affirmatively influences the selection of a provider.

Title

Refers to ownership of and rights a person has to possess, or the right of a person has of possession in property.

Title Policy Endorsement - Lien Priority

Refers to place in line of a lien holder where multiple claims on property secured or attached for payment of lien.

Discharge in Bankruptcy

Release of debtor from personal liability for certain discharable debts. Prevents creditors from taking action against debtor to collect certain debts. *does not wipe out judgments on RE

Virginia Title - Chapter 2 (Slide 65) Uniform Trade Practices Va. Code 38.2 Sec. 500-518 Investigative Consumer Reports

Report (or portion) which contains info related to person's character, reputation, mode of living, and is obtained through intervies with neighbors, friends, associates. Special Rules: 1. Agent cannot request unless they tells the insured and informs that they can request to be interviewed for report and a. Called a personal interview b. Insurer must institute procedures to conduct if requested. c. Can receive a copy. *If report by insurance support organization, the organization or agent must inform that personal interview is requested. The support org must institute reasonable procedures to conduct when requested.

Restrictive Covenants

Require an owner to abide by deed restrictions that apply o group of homes or lots, generally a part of a development plan or subdivision. -placed by original developer -deed should disclose the covenants.

Corporate Real Estate Transactions

Require certified copies of: 1. Articles of incorporation. 2. Corporate bylaws 3. Cert of good standing 4. List of Corporate officers and 5. Copies of meetings of the board.

RESPA Required Disclosures

Required Disclosures: 1. Special Information booklet 2. Loan estimate form. 3. Mortgage servicing disclosure statement Special disclosure for adjustable rate mortgage: 1. Consumer handbook for ARM 2. Loan program discloses for each type of arm.

Disclosure Statement

Required by some states which makes seller disclose material defects to buyer.

Conditions

Requirements or qualifications in a deed that if not followed allow grantor/heirs to take back property.

Agency Law

Requires high level of responsibility and loyalty. Applies to insurer and agents.

Virginia Title Commissioner Of Insurance Licensing After Termination

Resident agents who apply for license after termination of previous license: -cannot be issued a license unless the agent has successfully completed, subsequent to the end of the biennium the exam. In no event is the exam waived under these circumstances.

Virginia Title Commissioner of Insurance Additional Penalties from fines:

Resititution: 1. Equal to actual loss for following: a. Charging excessive rate. b. Use of discriminatory premiums. (1 year restitution from date determined) c. Failure to pay non-disputed claim d. Improper w/holding, misappropriation fo funds during business. Submitting Business w/o an Appointment 1. Penalized a sum equal to 1st year commission for placement of that business. 2. Subject to insurance law penalties. 3. Subject to having his/her license place on probationg/suspended. *can also suspend or revoke license.

Profits a prende

Right to profit from another's soil by severing rights

Minerals from Title Insurance Policy

Rights to minerals CAN be separated from interst in land. -if they have been separated from fee simple estate they cannot be insured and stated as exception. *endorsements can be obatined for damage to surface rights.

Virginia Title - Chapter 2 (Slide 65) Uniform Trade Practices Va. Code 38.2 Sec. 500-518 Premium Rate Discrimination

Risks are prohibited from being unfairly discriminatory between risks involving the same hazards and expense elements.

Avoidance - handling risk

Risks that can be avoided

RESA and Unauthorized Practice of Law

SA must not provide legal advice or guilty of unauthorized practice of law.

Virginia Title SCC/Commissioner of Insurance Authority

SCC regulates title industry through the Buerau of Insurance (under the Commission). Scope: Commission is charged with execution of all laws relating to insurance and insurers. Duty: all companies transacting or licensed to transact the business of insurane in VA are subject to INSPECTION, SUPERVISION, AND REGULATION BY THE COMMISSION.

Five Methods of Handling Risk

STARR(2) Avoidance, Retention, Sharing, Reduction, Transfer

Lot Sales

Sales of land, often in PUD -if more than 1000 must register with HUD and provide property reports and prospective buyers.

Virginia Title Commissioner Of Insurance Appointments

Scope: Every licensed agent may sell policies for any of the classes of insurance for which he is licensed on behalf of an insurer that is also licensed in VA for those classes of insurance. Even if agent not yet appointed yet: IF 1. Insurer w/in 30 days of execution of first insurance application/rejection of policy files with the Commission a notice of appointment -Insurer may elect to appoint an agent to represent him by a single notice of appointment for each appointment type applicable. **insurer must also provide the licensed agent w/in same 30 day period a verification that the notice of appointment was filed w/Commission. -if Commission says invalid, notifies the appointing insurer with 5 business days of receipt of the appointment notice. -if Commission says valid, Commission issues an acknowledgement of appointment to the agent within five business days of appointment notice.

Title Examination Process

Search of public documents, abstracts, etc. Public Records: 1. Deeds 2. Chain of Title 3. Tax Records 4. Assessments 5. Mortgages 6. Registry of Probate 7. Condominiums (ability to pay costs) 8. Historical Societies 9. Rights Pertaining to Land (Natural, mineral, riparian, navigable waters) 10. Attachments 11. Covenants 12. Conditions 13. Restrictions 14. Maps and Surveys 15. Government Records

Title Examiners Approved Attorneys

Search title, issue certificates and opinions, may be employee of insurer or someone they work with reguarly. -attorney must complete application -may work with multiple insurers or as agent

Mortage

Security for payment in RE

Land-Sale Contract

Seller holds title until buyer pays off property (buyer holds equitable title). *if not handled through a trust may have to use judicial foreclosure.

Virginia Title Commissioner of Insurance Illegal Rebates

Seller of real property cannot receive kickback or anything of value from title insurance (not even referral fee). -thing of value = payment, advance, funds, loans, service or other consideration

Virginia Title - Chapter 2 (Slide 65) Uniform Trade Practices Va. Code 38.2 Sec. 500-518 Notice of Information Collection and Disclosure Practices

Short Form Notice: 1. Can be used to meet notice if deliver at same time an opt out notice. -not required to also give long notice if provide option w/reasonable means to obtain such notice. -if same agent provided notice in last 12 months do not have to give another notice

Personal Property Trust

Similar to land trust but holds personal property including debt securities and other personal property (revocable living trust).

Lot and Block Method

Similar to plat except the lots are part of sub-division. Developer must survey the land and record the lots and blocks in land records.

Sole Properietor RE documentation Required:

Sole proprietiers treated like individual in RE. Identified by license, deed required to be provided by a business selling its real property.

Title Examination - Rights Pertaining to Land

Some follow w/o instrument, the insurer may except a right. Rights pertaining to land: 1. Natural rights (air/watercourse, noise, odor) *cannot be separated from the land. 2. Mineral rights - liquid and solid under the property. 3. Riparian rights (state law governs) 4. Navigable waters (bodies of water can be used as highway). 5. Non-navigable waters (ponds and creeks. Abutting owners won the cent of the bed).

Title Examination - Public Records

Starting point for all title examination. Include the following: 1. Deeds (look at current and go back.) a. Registry of Deeds - open to the public (format varies by state). b. Different from deed that is recorded.

LLC RE documentation Required:

State issued cert of good standing w/ the certified LLC and LLC must certify the agreement.

ALTA Owner's Policy Conditions Definitions Insureds

Successors to an insured by dissolution, merger, consolidation, distribution or reorginization; successor to an insured by its conversion to another entity.

Closing Escrow

Suggested 10 to 14 days prior, having all closing costs and details provided to SA. Lender documents delivered (once they review and approve, lender authorizes disbursements) Deed gets recorded then funds disbursed. *close of escrow occurs the day/hour/minute the documents are recorded and when property is transferred. -second delivery - when the buyer has the right to delivery of escrow

Abstract of Title

Summary of title search

Surety contract

Surety contracts - used early on (Grantor pays a premium to the insurer and contract is issued that guarantees that the insurer, or surety, will pay the entire debt of the principle.

Surety v. Insurance

Surety underwriter does not intend to pay it intends obligations will be fullfilled. Insurance - at some point will pay but collecting from many to pay few.

Title Policy Endorsement - Leasehold-Owner

Tenant's interest in the property is recognized and the policy will indemnify the owner for the expense he owes if tenant if the tenant is evicted due to an insured claim.

Marketability

Synonym for acceptability or transferability. *only court can say if title is truly marketable.

Virginia Title Commissioner Of Insurance Termination

Termination occurs for entities license in Va when: 1. Dissolution / discontinue partnerships. 2. Cert of organization, authority of LLC or cert of registration/authorization terminated LICENSES ARE ALSO TERMINATED. -individual licenses also terminaed w/in 90 calendar days after receivingnotice from commission of termination.

Virginia Title Commissioner Of Insurance Termination of SA last appointment

Termination of SA last appointment under his title insurance license triggers: 1. BOI notifies VA state bar to terminate the agent's registration. 2. Not allowed to act as agent under his title insurance agent's license until a new appointment takes effect.

Decedent's Estate

Testator - leaves will Testate - died WITH will *if leave spouse nothing they can take an elective share.

ALTA Title Commitment Agreement to Issue Policy

The insurer agrees to issue a policy to the insured according to the terms of the Commitment.(once issued the insurer is obligated under the terms). -when the insurer shows the policy amount and the insured name as the proposed insured in Schedule A, the commitment becomes effective as of commitment date shown in schedule A. Requirements: States that if the requirement is not met w/in a determined period of time after commitment, the obligation of the insurer under the commitment ends.

Benficiaries

Those entitled to trust property or payment derived from

Insurable Interest

The policy owner must face the possibility of losing money or something of value in the event of loss. -Insured has valuable consideration in property -Lenders have an insurable interest in the real property as they fund the loan.

Easements

The rights of a landowner has to use the land of another. Normally created by servient estate 1. Created by dedication, deed, grant (not by oral agreement). 2. Normally created by owner of the servient estate.

Escheat

The state takes property upon an owners death if there is no will & no heirs exist. -some states require court hearing others allow probate court to oversee

Non-Judical Foreclosure

Time frame: 1. Notice of default (instruction to trustee to proceed) 2. minimum reinstatement period to borrower 3. After 3 months of NOD, notice to trustee to sale in local paper 4. Property sold.

Virginia Title - Chapter 2 (Slide 65) Uniform Trade Practices Va. Code 38.2 Sec. 500-518 Notice of Information Collection and Disclosure Practices

Timing Requirements with Reinstatement/Change in Policy: 1. Notice must be provided no later than the time a request made. 2. Not required if personal info is collected from policyholder/public records.

Virginia Title - Chapter 2 (Slide 65) Uniform Trade Practices Va. Code 38.2 Sec. 500-518 Notice of Information Collection and Disclosure Practices

Timing Requirements with Renewal Policy: 1. No later than the policy renewal date 2. No notice required in connection with policy if: a. Personal info is collected only from the policy holder/or public records. b. A notice meeting these requirements has been given within last 24 months.

Errors and Omissions Insurance

Title companies and agents can purchase E&O insurance to cover the financial risks created by E&O. -many also gain this protection by using CPL

Title Examination - Condominums

Title examiner reviews condominum interest to see if can pay upkeep. Condominium Interest - collective term used to refer to condo declaration, bylaws, plans, plans as recorded. All instruments attached should be recorded.

Exclusions and Exceptions in Title Coverage

Title insurance does not usually cover future risks. Uninsurable risks = risks are excluded when the resultant financial consequences of the risk are immeasureable or measured with an unreasonable amount of difficulty. -Immeasurable = uninsurable

Exclusions and Exceptions in Title Coverage Riparian Rights Exclusion

Title insurance excludes riparian rights (drinking/irrigation) as it is not intended to cover estates or interests in waters.

Marketable Title

Title that has been decreed by court of equity to be free of defects/encumberances.

Title Policy Endorsements

What they are: can be used to modify the commitment or policy. Extra coverage. ALTA endorsement numbers: end in "6" if 2006 policy. if no six it is from 1992 ALTA policy version.

Grant

Transfer of real estate

Eminent domain

Transfer of title to the state through constitutional power (taking clause).

Deed of Trust

Trust holds collaterilized property

Federal Loan Closing and Fee Requirements

Two Common Types of Federal Loans 1. FHA 2. Va

General Partnership

Two or more people enter into certain business for profit.

Recording Index

Types: 1. Tract indexing - organized by grantor's name, alphabetically by LAST name 2. Microfiches - computerized database

Virginia Title Commissioner of Insurance Unfair Claims Settlement Practices

Unfair Claims Settlement Practice is prohibited in Virginia and is defined to include the following actions: 1. Misrepresentation of pertinent facts or insurance policy provisions related to coverage at issue. 2. Failure to acknowledge/act promptly w/ claim under the insurance. 3. Failure to adopt and implement reasonable standards for the prompt investigation of claims under the policy. 4. Refusing - arbitrarily - to pay claims. 5. Failure to affirm/deny coverage w/in a reasonable time after proof of loss completed. 6. Failure to act in good faith on reasonable claims. 7. Offering substantially less than the amount ultimately recovered in actions brought by the insureds. 8. Attempting to settle for less than a reasonable man would. 9. Attempting to settle based on altered application w/o insured's knowledge. 10. Paying claim w/o statement setting forth coverage in which payments are being made. 11. Delaying investigation or payment by requiring preliminary report documents and then asking for formal proof (or asking twice). 12. Failure to promptly settle where liability fairly clear. 13. Failure to promptly provide a reasonable explanation of the basis for the insurance policy in relation to the facts or appliable law for denial of claim or offer of a compromise settlement.

Virginia Title Commissioner Of Insurance CE Requirement Waiver

Upon good cause, Bd may waiver number of credites required. -good cause - includes long-term illness or incapacity and other emergency situations. -Request for waiver sent to Baord no later than 90 days prior to biennium. If illness manifest w/in 120 days of biennium, waiver by deadline. *30 days to approve/disapprove requests and 5 days from date of decision to notify.

Title Policy Endorsement - Non-Imputation Full Equity

Used when all ownership interest of an entity are transferred to a new party and a new owner's policy is issued to the new owners. *if transferred insurer will ask outgoing owners to sign a non-imputation affidavit (done nothing to jeopardize title) if did will indemnify. Applies exclusions also for: 1. Matters created suffered or agreed to by the insured. 2. Matters known to the insured but not found in public records. 3. Loss b/c insured has not paid value for the interest of the land covered by the policy.

Title Policy Endorsement - Co-Insurance

Used when more than one insurer

Title Policy Endorsement - Future Advance Priority

Used with future advancement of credit. Allows for coverage to change with advances/payments. -protects against loss of priority due to future advancements.

Disclosure of Appraisal Fee

Va law requires that the settlement statement disclose: 1. Fee charged for borrower for an appraisal 2. Fee for a valuation opinion on value of property. -these are prepared by automated mechanism (not licensed appraiser)

legal Description: Referencing other documents

Verbal testimony, photos, original surveys, plats, etc.

Conveyancer

Well educated individual who took the responsibility of providing advice and counsel on title assurance. -made up of lawyers/notaries/ RE dealer -oral statements developed into public records

Mezzanine Financing (Funding)

When a business needs financing so they issue ownership interest in the company. -endorsement used when all or some of equity interest in the insured entity are pledged collateral for a mezzanine loan or guarantee.

Virginia Title Commissioner Of Insurance Resident Business Entity Licensure

Who can transact insurance business: a. Resident Business Entities: Persons licensed and appointed as an agent can act on their behalf. b. Only business entities that are licensed and appointed may act agents.

Obtaining Information Under False Pretense

Willfully and knowingly obtaining info about person from ins organization agent under false pretenses is unlawful and: 1. Fine up to $10k 2. Up to 12 months in jail. (or both)

Virginia Title - Chapter 2 (Slide 65) Uniform Trade Practices Va. Code 38.2 Sec. 500-518 Notice of Information Collection and Disclosure Practices Correction/Amendment/Deletion of Recorded Personal Information

Within 30 days of individuals request to correct/amend information about the individual, the insurance institution/agent may either: Choice 1. Correct/amend/delete information in dispute. A. provide notice of corrected information AND B. provide it to any person designated by the individual who w/in previous 2 years received the recorded personal information. AND C. Any insurance support organization whose primary source of information is insurance and received personal information in last 7 years (exclusion if no longer store information about that individual).AND D. Any insurance support organization infor supplied to. or Choice 2 Notify the individual of: 1. Refusal to make corrections 2. Reason for refusal. 3. Individuals right to file a statement of the information if the info is not corrected.

Liens

a claim against property to secure payment of a debt or to satisfy a debt

Hazard

a condition that creates or increases a chance of loss.

Loss

a decrease in value, or amount needed to restore something to its original value. (Assigned a dollar value).

Physical Hazard

a physical condition that increases the frequency or severity of loss

Easement Appurtenant

a right of use that continues from owner to owner that involves a relationship between two parcels of land: a dominant parcel that benefits from a servient parcel

ALTA Owner's Policy Conditions Definitions Knowledge or known

actual knowledge (not constructive)

Virginia Title Commission of Insurance

all licenses granting authority to transact business of insurance in Virginia are granted and issued under the commission under its seal.

Probate Docket

all records related to the probated estates are submitted to the court and placed in probate docket. *title examiners can look for potential heirs and check to the registry of deeds to see if anyone has interest in property.

Reinsurance

an arrangement by which the primary insurer that initially writes the insurance transfers to another insurer part or all of the potential losses associated with such insurance

ALTA Owner's Policy Conditions Definitions Grantee insureds

an insured also defined as as grantee of an insured under a deed delivered w/o payment of actual valuable consideration conveying the title.

Abutement

bordering, adjacent land (physically adjoining)

Peril

cause of loss

Risk

chance of loss

Escrow Recorder

checks title one last time and records all documents (recorded based on priority).

Personal Contracts

contract between the insurance company and the insured; cannot be changed to someone else

Surveys

define land boundaries in a precise manner, the exact location of the property; also defines adjoining owner's property line. (Landowner and neighboring land owners can help with information)

Real Property / Real Estate

defined to mean land, buildings, fixtures and rights to adjoining land (i.e. easements)

Schedule A in Title Committment

describes terms of the policy that will be issued

Mortgage Company or Independent Assesment

differs from government tax assessment and better for market value

Moral Hazard

dishonesty or character defects in an individual that increase the frequency or severity of loss

Zoning

dividing an area into zones or sections reserved for different purposes such as residence and business and manufacturing etc

Estate

extent and nature of a person's interest in RE

Erosion

gradual wearing away

Accretion

growth in size or increase in amount of land/soil

Title Policy Endorsement - Creditors Rights

insurers against loss on loan/owner's policy due to fradulant conveyance from bankruptcy, creditors laws, or state insolvency.

Alienation

involuntary alienation - transfer of land w/o owner's consent (foreclosure/adverse possession)

Appurtenant

involves two landowners, easement benefits use and enjoyment of dominant estate

Accession

legal rights a property owner has to all rights of property (including air, mineral, etc.)

Land

legally, the soil, things growing in the soil, above and below groundwater, mineral and deposits all the way to center of earth and up to sky.

Community Property

property acquired during marriage and owned equally by both spouses. -if acquired with seperate funds = separate property. -at death 1/2 spouse and rest to the deceased's spouse estate.

Dominant Estate

property that benefits from an easement

Grantor

the individual who conveys the ownership rights of real property

Indemnity Contracts (most insurance contracts)

the insurance company is only required to compensate for actual losses, up to the policy limits (no profit). -insurance payment cannot exceed the amount of the insurable interest in property or item insured. -must restore insured to place before loss covered by insurance.

Negative Amorization

occurs when loan principal increases b/c periodic payments do not cover the loan interest charged during the loan payment period. -interest added to loan balance and outstanding loan amount increases over time.

Avulsion

occurs when new soil is added to property (by stream)

Title Examination - Registered Deed

one where all questions regarding PROPERTY LINES have been answered and cleared. -requires a survey by a state-approved surveyor. -a surveyor must file a property plan and description with the recordation office.

Trust Documents

outlines how the trust is handled

Corporation Board of Directors

oversee business; elected by shareholders; may delegate to committee. May be personally liable for negligence.

Per Capita

per person (by all living in row getting share)

Chattels

personal property (moveable property)

Easements in Gross

private person to use another's land (do not pass with title since there is no dominant estate). -generally not insurable b/c risks of loss/damage not effected by title.

Deed Attestation

process of a deed being signed, witnessed (generally two witnesses).

Covenants

promises that limit right of property owner

Servient Estate

provides the benefit

Abstract Plant

public records are indexed geographically rather than by last name

Reduction

reduced by precaution taken

Water rights

rights to use water from another persons property provided through easement (cross for source of water).

Tax Assessment Cap

some jurisdictions cap how much property tax may increase year to year.

Affidavits

statement from seller that cannot be confirmed through the title search (in writing and under oath)

Insurance Pools

states sometime establish these, where all insurers in a state must participate to cover high-risk properties.

Building

structure permanently affixed to land and intended to form a part of the land.

Avulsion

sudden gain or loss of land the sudden separation of land from one property and its attachment to another, especially by flooding or a change in the course of a river.

Reinsurer (assuming company)

the company to which the risk is transferred to from ceding insurer.

Ceding insurer

the insurer who originally wrote the policy.

Per Stirpes

the method of proportionately dividing an estate between beneficiaries according to their deceased ancestor's share. *Followed by Va.

Amoritization

the reduction of a loan balance through payments made over a period of time

Leasehold Interest

the right held by the lessee to use and occupy real estate for a stated term and under the conditions specified in the lease

Real Property

transferred by deed controlled by real property laws

Assignor

transfers the right of the contract (does not relieve assignor's liability under the contract).

ALTA Title Commitment Conditions - Limitation of Our Liability

under this condition the insurer's only obligation to the insured to issue the policy referred to in the commitment, once the insured has met requirements. -if error in commitment causes a loss, insurer only liable up to actual loss due to the error.

Title Policy Endorsement - Assignment

used on loan policy when benefical interest in the insured mortgage or deed or trust has been assigned. -assumes assignment of interest under the mortgage was valid no reconveyance or modifications or subordination of the assignment appears in the public record.

Will

written instrument which takes effect after the maker of the will is deceased and through which the disposition of the deceased's property is affected. -surviving spouse has 6 months to file for elective share