Title Insurance Basics

A deed is the common instrument used to convey title to real property. A deed is a legal document that transfers ownership of a property from one party to another. It contains the names of the parties involved, a description of the property, and any conditions or restrictions on the transfer. Unlike a mortgage, which is a loan secured by the property, a deed actually transfers ownership. A note and a bond are financial instruments used for borrowing money and are not directly related to conveying title to real property.

The original thirteen colonies of the United States were colonies of England. England established these colonies in the 17th and early 18th centuries, primarily for economic purposes. The colonies were governed by the British Crown and were subject to British laws and regulations. The colonists eventually became dissatisfied with British rule, leading to the American Revolution and the eventual independence of the United States.

A title insurance policy must be based on a reasonable examination of the record title in most jurisdictions. This means that the insurance company must review and assess the public records related to the property's ownership and any potential claims or encumbrances. This examination helps to identify any potential issues or defects that may affect the property's title. By conducting a thorough examination, the insurance company can accurately assess the risk associated with insuring the title and determine the appropriate coverage and premium.

Most laws regarding title to real property are set at the state level of government. This is because real property laws, including those related to ownership, transfer, and use of land and buildings, are typically governed by the individual states rather than the federal government. State governments have the authority to establish and enforce laws specific to their jurisdiction, including laws related to real estate ownership and transactions. Municipal governments may have some regulations related to real property, but the primary authority lies with the state government. National and international levels of government generally do not have jurisdiction over specific property laws.

A security instrument in real estate, such as a mortgage or deed of trust, is typically used to secure the borrower's obligation to repay a bond or note. This means that if the borrower fails to repay the bond or note as agreed, the lender can enforce the security instrument and potentially foreclose on the property to recover the debt. Therefore, the correct answer is bond or note.

The $1,000 held in escrow belongs to no one. The disposition of the money is governed by the escrow agreement. This means that the money is not owned by the buyer, seller, or title insurance agent until the issue involved in the purchase of the property is resolved. The escrow agreement will determine how the money is to be used or returned based on the outcome of the issue.

An insurance agent's first duty is to the underwriter. The underwriter is the person or company that assesses the risk associated with insuring a particular individual or entity and determines the terms and conditions of the insurance policy. The agent acts as a representative of the underwriter and works to find and secure clients who meet the underwriter's criteria for insurability. The agent's primary responsibility is to serve the interests of the underwriter by finding qualified clients and helping to manage the underwriter's risk.

Title insurance is not a guarantee that the title is clear. It is a type of insurance that protects property owners and lenders from financial loss due to defects in the title or ownership of the property. It provides coverage for legal expenses in defending the title, as well as any losses incurred if the title is found to be invalid. However, it does not guarantee that the title is clear from any defects or issues.

RESPA, which stands for the Real Estate Settlement Procedures Act, is a federal law that regulates certain aspects of residential real estate transactions. It requires lenders to provide borrowers with specific disclosures and prohibits certain practices, such as kickbacks and referral fees. The purchase of a residential condominium unit with a mortgage falls under the purview of RESPA because it involves a residential property transaction that includes a mortgage. The other options, a cash purchase of a residential property, the refinance of a first mortgage on a commercial property, and the purchase of an industrial property, do not involve residential properties or mortgages, and therefore are not regulated by RESPA.

The correct answer is The Common Law and Statutes. The law governing real property in most states is derived from two main sources: the common law and statutes. The common law refers to legal principles and rules that have been developed through court decisions over time. Statutes, on the other hand, are laws that have been enacted by legislatures. Together, these two bodies of law provide the framework for the regulation and protection of real property rights.

The correct answer is "The Common Law." In most states, the body of law made by published decisions of appellate courts is known as the common law. This refers to the legal principles and precedents established through court decisions, rather than statutes or regulations. The common law is a significant source of law in countries with a common law legal system, such as the United States, England, and Canada. It is based on the principle of stare decisis, which means that courts are bound to follow previous decisions when deciding similar cases.

A deed of conveyance is not a common form of security instrument for real property in one or more states. A deed of conveyance is a legal document used to transfer ownership of real property from one party to another, but it does not serve as a security instrument. On the other hand, a mortgage, a security deed, and a deed of trust are commonly used as security instruments for real property, providing a lender with a security interest in the property to secure a loan.