A buyer in Moore, Oklahoma is closing on a home purchase. The title company informs the buyer that the seller's chain of title was compiled by a licensed abstractor, and the buyer's attorney has issued a title opinion based on the abstract. The buyer's lender, headquartered in Texas, insists on a standard title insurance commitment instead. Which statement best describes the Oklahoma closing practice and the lender's request?
Correct Answer
B) The abstract-and-opinion method is a recognized Oklahoma closing practice, but lenders may still require title insurance as a condition of the loan.
Oklahoma has one of the strongest abstractor traditions in the United States, regulated by the Oklahoma Abstractors Act (Title 1 O.S. §§ 1-31). The abstract-and-opinion method — where a licensed abstractor compiles the chain of title and an attorney renders a title opinion — is a well-established and recognized Oklahoma closing practice. However, this does not prohibit lenders from requiring title insurance as a condition of making a loan. Many institutional lenders, especially those headquartered in other states, routinely require a lender's title insurance policy regardless of state practice. Both methods can coexist in an Oklahoma transaction.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Predatory lending refers to unfair, deceptive, or abusive lending practices that impose unjustified terms on borrowers, often targeting vulnerable populations. It includes practices like excessive fees, inflated appraisals, and unnecessary refinancing.
RESPA is a federal law that requires lenders to provide borrowers with information about settlement costs, prohibits kickbacks and referral fees, and limits escrow account deposits. It applies to federally related mortgage loans.
The secondary mortgage market is where existing mortgage loans are bought and sold between lenders, investors, and government-sponsored enterprises (GSEs) like Fannie Mae, Freddie Mac, and Ginnie Mae.
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