Escrow & TitleIntermediateAlaska Exam

A 'cloud on title' refers to:

AWeather-related damage affecting the property
BAny encumbrance or claim that may affect the marketability of titleCorrect
CA lender's right to accelerate the loan
DThe physical boundaries of the property being unclear, in most cases

Why Any encumbrance or claim that may affect the marketability of title Is Correct

Answer B: Any encumbrance or claim that may affect the marketability of title

A cloud on title is any outstanding claim, lien, encumbrance, or other issue that may cast doubt on the owner's clear title. Examples include old unsatisfied mortgages, unresolved court judgments, or conflicting ownership claims.

Exam Tip: Escrow & Title

Escrow questions test the neutral third-party role and the sequence of closing events. Remember that the escrow agent acts as a dual agent for both buyer and seller and cannot advocate for either side.

Key Escrow & Title Terms in This Question

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