A Tampa buyer is purchasing a property where the title search reveals an old mortgage from 1995 that was never properly released. The current owner claims it was paid off years ago but has no documentation. How should this situation be handled regarding title insurance?
Correct Answer
A) The title company should require the old mortgage to be resolved before issuing a clear policy
Correct: A - The title company should require the old mortgage to be resolved before issuing a clear policy. The title company should require the old mortgage to be properly resolved (through a release or quiet title action) before issuing a clear policy. Why not B: This option is incorrect because "Title insurance will automatically cover this issue without any action needed" does not match the rule tested by the question. The correct answer is "The title company should require the old mortgage to be resolved before issuing a clear policy". The title company should require the old mortgage to be properly resolved (through a release or quiet title action) before issuing a clear policy. Why not C: This option is incorrect because "The buyer should accept the risk since the mortgage is over 20 years old" does not match the rule tested by the question. The correct answer is "The title company should require the old mortgage to be resolved before issuing a clear policy". The title company should require the old mortgage to be properly resolved (through a release or quiet title action) before issuing a clear policy. Why not D: This option is incorrect because "The title company should issue the policy with this as a known exception" does not match the rule tested by the question. The correct answer is "The title company should require the old mortgage to be resolved before issuing a clear policy". The title company should require the old mortgage to be properly resolved (through a release or quiet title action) before issuing a clear policy.
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In Florida, what is the primary difference between an owner's title insurance policy and a lender's title insurance policy?
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In Orange County, Florida, a buyer is purchasing a home for $380,000 with a mortgage of $304,000. If the title insurance premium rate is $5.75 per $1,000 for the owner's policy and $2.25 per $1,000 for the lender's policy, what is the total cost for both policies?