Escrow & Title
What is the purpose of title insurance?
ATo insure the property against fire and theft
BTo protect against defects in title that existed before the purchase✓ Correct
CTo guarantee the property's market value
DTo insure the lender against the borrower's default
Explanation
Title insurance protects the buyer (owner's policy) and lender (lender's policy) against losses from title defects, liens, or encumbrances that existed before the purchase.
Related California Escrow & Title Questions
- A 'mechanic's lien' can be filed by:
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- An abstract of title differs from a title insurance policy in that an abstract:
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- What is the primary function of escrow in a California real estate transaction?
- Which type of title insurance protects the lender?
- What is a preliminary title report?
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