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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Related Topics & Key Terms
Key Terms:
Related Concepts
The chain of title is the sequential history of all transfers of ownership for a specific property, from the original source (typically a government patent or grant) to the present owner. An unbroken chain is essential for marketable title.
The closing process, also called settlement, is the final step in a real estate transaction where documents are signed, funds are disbursed, and title is officially transferred from the seller to the buyer.
Constructive notice is the legal presumption that a person has knowledge of information that is available through public records or visible inspection of the property, regardless of whether they actually knew about it.
More Titles Deeds Recording Questions
A Tampa property is being purchased for $450,000. The buyer wants to know the cost of owner's title insurance. Using Florida's promulgated rate of $5.75 per $1,000 of coverage, what is the title insurance premium?
In a Tampa transaction, a buyer wants the Florida rule on general warranty. Which statement is correct?
Which answer most accurately states the Florida rule for general warranty?
Sarah is selling her Miami Beach condominium to Robert. At closing, she signs a deed that contains warranties that she owns the property and has the right to convey it, but provides no warranties against defects that existed before she acquired the property. What type of deed did Sarah most likely execute?
John and Mary own property in Jacksonville as tenants by the entirety. John wants to secretly transfer his interest to his business partner without Mary's knowledge or consent. He executes a quitclaim deed to his partner. What is the effect of this deed?
- → What is the main difference between a general warranty deed and a special warranty deed in Florida?
- → Under Florida law, what does 'constructive notice' mean in the context of recorded deeds?
- → Which answer most accurately states the Florida rule for chain of title?
- → In Florida, all of the following situations would typically be excluded from standard title insurance coverage EXCEPT:
- → Non-single-family real property in Miami-Dade County is conveyed for $220,000. What total deed documentary stamp tax and surtax are due?
- → Sarah is purchasing a home in Miami and her attorney discovers that the current owner's deed was never properly recorded. The seller has been living in the property for 15 years and paying taxes. What is the most likely outcome regarding the validity of the seller's ownership?
- → Which deed is most commonly used in Florida residential transactions?
- → Sarah discovers that her neighbor's fence encroaches 3 feet onto her property, which she purchased 2 years ago in Jacksonville. Her title insurance policy shows no survey exception. What is the most likely outcome regarding her title insurance claim?
- → A Florida owner uses a quitclaim deed to transfer whatever interest the owner has to a family member. Which statement about that instrument is incorrect?
- → Lisa conveys property to Tom via warranty deed on Monday but doesn't record it. On Wednesday, Lisa conveys the same property to Susan via warranty deed, and Susan immediately records her deed. Susan had no knowledge of the prior conveyance to Tom. Under Florida's recording statute, who has superior title?
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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?