Escrow & Title
An owner's title insurance policy in Arizona protects:
AThe lender against title defects
BThe buyer/owner against title defects that existed prior to the policy's issuance✓ Correct
CThe seller against undisclosed liens
DThe escrow company against errors in closing documents
Explanation
An owner's title insurance policy protects the buyer/property owner against losses arising from title defects, liens, or encumbrances that existed prior to the policy's effective date and were not discovered in the title search.
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Key Terms to Know
Title Insurance
Insurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
EscrowA neutral third-party arrangement where funds, documents, and instructions are held until all conditions of a real estate transaction are satisfied.
EncumbranceAny claim, lien, charge, or liability attached to real property that affects its value or limits its use.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Math Concepts
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